The Fourth Quarter of 2025: 59% of Total Foreign Asset Balances of the Palestinian Economy are Cash and Deposits

SadaNews - The net balance of the international investment position reached 8,614 million dollars by the end of the second quarter of 2025. The Palestinian Central Bureau of Statistics and the Palestinian Monetary Authority issued preliminary results for the international investment position and foreign debt of Palestine as of the end of the second quarter of 2025 and the end of 2024, as part of the periodic issuance of the international investment position and external debt statistics for Palestine, which represents a continuation of the joint efforts being made by the two institutions. These results indicate that the disparity between the balances of the Palestinian economy's investments outside of Palestine and the balances of foreign investments in the Palestinian economy (external assets – foreign liabilities) remains significant, amounting to 8,614 million US dollars. 59% of the total foreign asset balances of the Palestinian economy are cash and deposits at the end of the second quarter of 2025 due to the lack of a Palestinian national currency. Additionally, receivables from Israel regarding clearance funds increased by about 23% compared to the previous quarter. In this context, the results indicate that the total asset balances of the Palestinian economy invested abroad reached 15,058 million US dollars, distributed between direct foreign investment at 2%, portfolio investments at 14%, and other investments at 75% (mainly cash and deposits), with reserve assets at 9%. 57% of the total foreign liabilities (obligations) on the Palestinian economy at the end of the second quarter of 2025 is direct foreign investment. In contrast, the total foreign liabilities (obligations) on the Palestinian economy (non-resident investments in Palestine) amounted to about 6,444 million US dollars, distributed between direct foreign investment at 57% (mainly banks, insurance companies, and telecommunications companies owned by non-residents, along with buildings owned by non-resident families, valued at 803.6 million US dollars), portfolio investments at 0.1%, and other investments (mainly loans and deposits from abroad) at about 33%. The balance of government external debt stabilized at around 1.3 billion US dollars by the end of the second quarter of 2025. Preliminary results indicated that the total external debt balance on the Palestinian economic sectors reached approximately 2,118 million US dollars by the end of the second quarter of 2025, showing an increase of less than 1% compared to the previous quarter. This was distributed between government debt at 64% (in favor of Arab and international financial institutions, the most significant of which are the Al-Aqsa Fund, the Qatar National Bank, and the World Bank), the banking sector at 33% (deposits of non-residents in banks operating in Palestine), other sectors (non-bank financial companies, non-financial companies, civil society institutions, and households) at 2%, and borrowing between affiliated companies at less than 1%. It is noteworthy that the international investment position represents a record of the balances of investments by residents in Palestine (individuals, businesses, and the government) invested abroad as 'assets' on one side, and balances of investments owned by residents outside Palestine (individuals, businesses, and governments) and invested in Palestine as 'liabilities' on the other side. These assets and liabilities are classified (according to the "Balance of Payments Manual," fifth edition issued by the International Monetary Fund in 1993) into direct investment (investment of 10% or more in the capital of a non-resident entity), portfolio investments (investment of less than 10% in the capital of a non-resident entity in addition to investment in bonds), and other investments (balances of trade credits, loans, cash, and deposits, as well as any other assets or liabilities), in addition to reserve assets, which are defined as the balances held by central banks/monetary authorities to address imbalances in the balance of payments, which fall within the asset side only. As for the external debt, it represents a record of the debts owed by the Palestinian economic sectors to non-residents, including loans from non-residents and deposits of non-residents held in the banking sector in Palestine, Palestinian bonds purchased by non-residents, and debt transactions conducted between non-resident companies and those affiliated and connected to Palestine, as well as any other obligations on the Palestinian economy not mentioned. External debt data is obtained from the liabilities side of the international investment position system (debt items), based on the External Debt Statistics Handbook issued by the International Monetary Fund in 2003, which is aligned with the fifth edition of the Balance of Payments Manual.