Download Press Release

BANK OF ISRAEL
Office of the Spokesperson and Economic Information
March 13, 2016
Press Release
Israel's International Investment Position (IIP), December 2015






In the fourth quarter of 2015, Israel’s surplus of assets over liabilities vis-à-vis
abroad declined by about $4.5 billion (about 6.2 percent), in contrast to the
previous three quarters of 2015, in which there was a cumulative increase of
about $7.9 billion (12.2 percent). The decline in the surplus during the fourth
quarter derived mainly from price changes and changes in the exchange rate
that increased the value of outstanding liabilities.
For the full year of 2015, the surplus of assets over liabilities vis-à-vis abroad
increased by $3.4 billion (5.2 percent), to about $68 billion at the end of
December. An increase of $17.9 billion (about 5.3 percent) in the value of
Israelis’ assets abroad was partly offset by an increase of $14.5 billion (about
5.4 percent) in the value of Israelis’ liabilities to abroad.
The increase in the value of the asset portfolio derived mainly from a
significant flow of direct investments ($9.7 billion, 12.2 percent) and financial
investments ($10 billion, 9.4 percent) abroad, and from an increase in foreign
exchange reserve assets ($4.5 billion, 5.2 percent).
The increase in the gross balance of liabilities to abroad derived mainly from
the flow of direct investments in Israel ($11.6 billion, 12.4 percent) and from
an increase in the prices of shares held by nonresidents ($7.3 billion, about 6
percent).
In 2015, the gross external debt to GDP ratio declined by 3.9 percentage
points, to 30.3 percent at the end of December, in contrast with an increase of
0.9 percentage points in 2014. The decline derived mainly from the decline in
gross external debt in parallel with the increase in GDP.
The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone
(negative net external debt) increased in 2015 by about $18.6 billion (18.7
percent), to about $118 billion at the end of the year.
Bank of Israel - Israel's International Investment Position (IIP), December 2015
Page1 Of7
Israel's net assets abroad (the surplus of assets over liabilities) increased by $3.4
billion (5.2 percent) in 2015, to around $68 billion at the end of December. An increase
of $17.9 billion (about 5.3 percent) in the value of Israelis’ assets abroad was partly
offset by an increase of about $14.5 billion (5.4 percent) in the value of Israelis’
liabilities to nonresidents (Figure 1).
The increase in the gross value of liabilities during the year was derived mainly from a
significant flow of direct and financial investments abroad by Israelis, and from an
increase in the foreign exchange reserves. The increase in the gross value of liabilities
to nonresidents mainly reflected the flow of direct investments in Israel by
nonresidents and an increase in the value of shares held by nonresidents.
In the fourth quarter of the year, the upward trend in the surplus of Israelis’ assets
was halted, and the surplus declined by about $4.5 billion. The balance of liabilities to
abroad increased ($16.7 billion, 6.2 percent) by a greater rate than the increase in the
balance of assets abroad ($12.2 billion, 3.6 percent), mainly due to the larger effect of
prices and the exchange rate on the balance of liabilities (3.7 percent).
Bank of Israel - Israel's International Investment Position (IIP), December 2015
Page2 Of7
The value of Israel's assets abroad increased in 2015 by about $17.9 billion (5.3
percent), to about $353 billion at the end of the year, mainly reflecting significant flow
of direct and financial investments, totaling about $19.7 billion (5.9 percent).
The value of the financial investments portfolio increased by $8 billion (7.5 percent)
in 2015: the net flow of investments by Israelis of about $10 billion, mainly in foreign
bonds, was partly offset by stock price declines on the markets abroad and the effect of
changes in the exchange rate on the portfolio.
The value of direct investments abroad increased by about $9.7 billion (12.1
percent) in 2015, mainly as a result of the flow of investments in share capital and an
owners’ loan to one large company.
The value of other investments abroad declined by about $4 billion (6.2 percent) in
2015. Withdrawals of $5.2 billion from deposits by Israeli banks in foreign banks
were partly offset by an increase of about $1.6 billion in deposits abroad by Israeli
residents.
The value of foreign exchange reserves increased by about $4.5 billion (5.1 percent)
in 2015. Bank of Israel foreign exchange purchases totaling $7.3 billion were partly
offset by the effect of the weakening of the dollar against major currencies.
The composition of residents' securities portfolio abroad. During the fourth quarter
of the year, there was an increase in the proportion of direct investments, further to the
increase in the previous quarter. In contrast, there was a decline in the proportion of
investments in financial shares and bank deposits (Figure 2).
During 2015, there was a decline in the share of stocks in the portfolio, in contrast with
stability in this proportion in the previous two years. The decline in the proportion of
deposits abroad continued. In contrast, there was an increase in the proportion of direct
investments and investments in bonds in the asset portfolio.
Bank of Israel - Israel's International Investment Position (IIP), December 2015
Page3 Of7
The balance of Israel's liabilities to abroad increased in the fourth quarter by about
$16.7 billion (6.2 percent), and by $14.5 billion (5.4 percent) during the course of the
year, to about $285 billion at the end of December.
The value of direct investments in the economy increased by $11.1 billion (11.9
percent) in 2015, derived mainly from the flow of direct investments in share capital
($9.6 billion, 11.6 percent).
The value of financial investments (stocks and bonds) increased by about $9.5
billion (7.8 percent) in 2015. There was a marked increase, mainly during the fourth
quarter, in the prices of Israeli stocks held by nonresidents ($7.3 billion, 8 percent),
combined with net financial investments in share capital ($4.6 billion, 5 percent).
The value of other investments declined by about $6 billion (11 percent) in 2015.
There were withdrawals from deposits by nonresidents and banks from abroad ($3.8
billion, 19 percent), in parallel with a decline in loans ($1.4 billion, 7.2 percent).
The value of nonresidents' financial portfolio on the Tel Aviv Stock Exchange
increased in 2015 by $3.4 billion (10.1 percent), to about $37.1 billion at the end of
December, mainly an increase of $3 billion in the balance of investments in financial
stocks (Figure 3).
Bank of Israel - Israel's International Investment Position (IIP), December 2015
Page4 Of7
The gross external debt
Israel's gross external debt declined by $6.8 billion (7 percent) in 2015, mainly
reflecting nonresidents’ withdrawals from deposits in Israeli banks, a decline in loans,
and realizations by nonresidents of Israeli bonds.
The ratio of gross external debt to GDP declined by 3.9 percentage points in 2015,
to 30.3 percent at the end of December, in contrast to an increase of 0.9 percentage
points in 2014. The increase derived mainly from a decline in gross external debt in
parallel with an increase in GDP (Figure 4).
Bank of Israel - Israel's International Investment Position (IIP), December 2015
Page5 Of7
The net external debt
The surplus of assets over liabilities abroad in debt instruments alone (negative net
external debt) increased by about $10.8 billion (10 percent) in the fourth quarter, and
by $18.6 billion (18.7 percent) in 2015 as a whole, and reached about $118 billion at
the end of December (Figure 5).
The balance of short-term debt assets was about $138 billion at the end of
December, mostly in the foreign exchange reserves, reflecting a coverage ratio of 3.8
times short-term debt, a slight increase compared to the end of 2014 (when it was 3.4
times short-term debt).
Bank of Israel - Israel's International Investment Position (IIP), December 2015
Page6 Of7
For the complete data file, click here.
Bank of Israel - Israel's International Investment Position (IIP), December 2015
Page7 Of7