Israel’s International Investment Position (IIP), June 2016
In the second quarter of 2016, Israel’s surplus of assets over liabilities vis-à-vis abroad increased by about $5.5 billion (about 7 percent), further to an increase of about $11.2 billion (16.3 percent) in the first quarter of the year.
· In the second quarter of 2016, Israel’s surplus of assets over liabilities vis-à-vis abroad increased by about $5.5 billion (about 7 percent), further to an increase of about $11.2 billion (16.3 percent) in the first quarter of the year. Most of the increase in the surplus during the second quarter of 2016 is a result of a decline in outstanding liabilities, mainly the net effect of prices on the balance of financial investments by nonresidents in Israeli share capital, while transactions on the assets and liabilities sides offset each other.
· The decline in the gross balance of liabilities to abroad in the second quarter derived mainly from a marked decline in the prices of Israeli shares held by nonresidents ($-3.8 billion, -4 percent).
· In the second quarter of 2016, there was a slight increase in the value of the asset portfolio of Israelis abroad ($700 million, 0.2 percent), derived mainly from an increase in the value of foreign exchange reserve assets ($1.9 billion, 2 percent) and the flow of direct investment in foreign share capital ($1.3 billion, 1.4 percent). These increases were partly offset by net withdrawals from Israeli bank deposits abroad, repayment of makam, and net realizations of financial stocks.
· The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone (negative net external debt) increased in the second quarter of 2016 by about $1.5 billion (1.3 percent), to about $121 billion at the end of the quarter. Further to the trend derived from an increase in assets in debt instruments and a decline in gross debt (in dollar terms).
· The gross external debt to GDP ratio was virtually unchanged in the second quarter, at 29.4 percent at the end of June. An increase in GDP was matched by a similar increase in the shekel value of gross external debt as a result of the depreciation of the shekel during the period.
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