57% of the Total Foreign Asset Balances of the Palestinian Economy are Currency and Deposits

SadaNews - $9,491 million is the net balance of the International Investment Position at the end of the third quarter of 2025

The Palestinian Central Bureau of Statistics and the Palestinian Monetary Authority released the preliminary results of the International Investment Position and external debt of Palestine as of the end of the third quarter of 2025, as part of the periodic publication of the International Investment Position and external debt statistics for Palestine, which represents a continuation of the joint efforts by the two institutions.

These results indicate that the disparity between the balances of the Palestinian economy's investments outside Palestine and the foreign investments in the Palestinian economy (external assets - foreign liabilities) remains significant, amounting to $9,491 million.

57% of the total foreign asset balances of the Palestinian economy are currency and deposits as of the end of the third quarter of 2025, due to the lack of a Palestinian national currency. Additionally, receivables from Israel in customs funds increased by approximately 28% compared to the previous quarter.

In this context, the results indicate that the total balances of the Palestinian economy's foreign assets invested abroad reached $15,803 million, distributed among foreign direct investment at a rate of 2%, portfolio investments at 14%, and other investments at 76% (most notably currency and deposits), with reserve assets at 8%.

55% of the total foreign liabilities (obligations) of the Palestinian economy at the end of the third quarter of 2025 is foreign direct investment.

In contrast, the total foreign liabilities (obligations) on the Palestinian economy (balances of non-residents invested in Palestine) amounted to approximately $6,312 million, distributed between foreign direct investment at 55% (including banks, insurance companies, and telecommunications companies owned by non-residents, as well as properties owned by non-resident families, valued at $3,489 million), portfolio investments at 11%, and other investments (mainly loans and deposits from abroad) at about 34%.

The external debt balance of the government stabilized at around $1.3 billion at the end of the third quarter of 2025.

Preliminary results indicated that the total external debt on the Palestinian economic sectors reached approximately $2,170 million at the end of the third quarter of 2025, reflecting an increase of 2% compared to the previous quarter. It is distributed between debt on the government sector at 62% (in favor of Arab and international financial institutions, including the Al-Aqsa Fund, the Qatari National Bank, and the World Bank), the banking sector at 35% (deposits of non-residents in banks operating in Palestine), the other sectors (non-banking financial companies, non-financial companies, civil institutions, and households) at 2%, and intercompany borrowing at less than 1%.
    
It is noteworthy that the International Investment Position serves as a record of investment balances of residents in Palestine (individuals, companies, and the government) invested abroad under the heading (assets) on one side and the balances of investments owned by residents outside Palestine (individuals, companies, and governments) invested in Palestine under the heading (liabilities) on the other side. These assets and liabilities are classified (based on the "Balance of Payments Manual" 5th edition issued by the International Monetary Fund in 1993) into direct investment (investment of 10% or more of the capital of a non-resident institution), portfolio investments (investment of less than 10% of the capital of a non-resident institution in addition to investment in bonds), other investments (balances of trade credits, loans, currency and deposits, and 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 under the asset side only.

The external debt represents a record of the debt balances owed by the Palestinian economic sectors to non-residents, including loans from non-residents, deposits of non-residents in the banking sector in Palestine, Palestinian bonds purchased by non-residents, and debt transactions between non-resident companies and their affiliated and associated ones in Palestine, as well as any other obligations on the Palestinian economy not mentioned. Data on external debt from the liabilities side in the International Investment Position system (debt items) is obtained based on the external debt statistics guide issued by the International Monetary Fund in 2003, which is consistent with the Balance of Payments Manual 5th edition.