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

SadaNews - $10,720 million net balance of international investment position at the end of the fourth quarter of 2025

The Palestinian Central Bureau of Statistics and the Palestinian Monetary Authority have issued preliminary results on the international investment position and external debt of Palestine as of the end of the fourth quarter of 2025, as part of the periodic release on the international investment position and external debt statistics for Palestine, representing a continuation of the joint efforts carried out by the two institutions.

These results indicate that the disparity between the balances of Palestinian investments placed outside Palestine and the balances of foreign investments placed in the Palestinian economy (external assets - foreign liabilities) remains significant, amounting to $10,720 million.

57% of the total balances of external assets in the Palestinian economy are currency and deposits by the end of the fourth quarter of 2025, due to the absence of a Palestinian national currency. Additionally, receivables from Israel from tax clearance funds have increased by approximately 18% compared to the previous quarter.

In this context, the results indicate that the total balances of Palestinian economic assets invested abroad have reached $17,358 million, distributed between direct foreign investment at 2%, portfolio investments at 10%, and other investments at 77% (most notably currency and deposits), along with reserve assets at 11%.

75% of the total foreign liabilities (obligations) on the Palestinian economy at the end of the fourth quarter of 2025 are direct foreign investments

In contrast, the total balances of foreign liabilities (obligations) on the Palestinian economy (investments by non-residents in Palestine) amount to approximately $6,638 million, distributed between direct foreign investments at 57% (most notably banks, insurance companies, and telecommunications companies owned by non-residents, in addition to properties owned by non-resident families, valued at $3,770 million), portfolio investments at 11%, and other investments (most notably loans and deposits from abroad) at around 32%.

The balance of government external debt stabilized at approximately $1.3 billion at the end of the fourth quarter of 2025.
Preliminary results indicate that the total balance of external debt on the Palestinian economic sectors has reached approximately $2,125 million at the end of the fourth quarter of 2025, marking a decrease of 2% compared to the previous quarter. This debt is distributed as follows: 64% to the government sector (owed to Arab and international financial institutions, including Al-Aqsa Fund, the Qatar National Bank, and the World Bank), 33% to the banking sector (deposits by non-residents in banks operating in Palestine), 2% to other sectors (non-banking financial companies, non-financial companies, NGOs, and households), and less than 1% to borrowing between affiliated companies.

It is noteworthy that the international investment position represents a record of the balances of investments by residents of Palestine (individuals, companies, and the government) invested abroad under the title (assets) on one hand, and investments owned by residents outside Palestine (individuals, companies, and governments) invested in Palestine under the title (liabilities) on the other hand. These assets and liabilities are classified (based on the "Balance of Payments Manual" fifth edition published by the International Monetary Fund in 1993) into direct investment (investment of 10% or more in 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), and other investments (balances of trade credits, loans, currency and deposits, and any other assets or liabilities), in addition to reserve assets 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.

On the other hand, external debt represents a record of the debts owed by the Palestinian economic sectors to non-residents, including loans from non-residents and deposits by non-residents in the banking sector in Palestine, Palestinian bonds purchased by non-residents, debt transactions between non-resident companies and those affiliated and associated in Palestine, and any other obligations on the Palestinian economy not mentioned. Data on external debt liabilities in the international investment position system (debt items) are obtained based on the "External Debt Statistics Manual" published by the International Monetary Fund in 2003, aligned with the fifth edition of the Balance of Payments Manual.