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BANK OF ISRAEL
Office of the Spokesperson and Economic Information
December 18, 2016
Press Release
Israel’s International Investment Position (IIP), Third Quarter of 2016
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In the third quarter of 2016, Israel’s surplus of assets over liabilities vis-à-vis
abroad increased by about $10.6 billion (about 12.4 percent), further to an
increase of about $5.5 billion (7 percent) in the second quarter of the year. Most of
the increase in the surplus during the third quarter of 2016 is a result of an
increase in the prices of foreign financial shares held by Israelis, and of a decline
in the prices of Israeli financial shares held by nonresidents.
The increase in the value of the portfolio of Israelis’ assets held abroad in the third
quarter ($15.4 billion, 4.3 percent) was concentrated in direct investments in
foreign share capital ($7.6 billion, 9.4 percent) and an increase in the prices of
foreign financial shares held by Israelis ($3.1 billion, 5.3 percent).
The increase in the gross balance of liabilities to abroad in the third quarter ($4.8
billion, 1.8 percent) derived mainly from net investments by nonresidents in
financial share capital ($4.4 billion, 5 percent) and direct investments ($2.8 billion,
3 percent), which were partly offset by a decline in the prices of Israeli shares held
by nonresidents ($2.1 billion, 2.3 percent).
The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone
(negative net external debt) increased in the third quarter of 2016 by about $4.6
billion (3.8 percent), to about $125 billion at the end of the quarter.
The gross external debt to GDP ratio declined in the third quarter, to 28.2 percent
at the end of September, the result of a decline in the shekel value of gross external
debt that was greater than the increase in GDP.
Bank of Israel - Israel’s International Investment Position (IIP), Third Quarter of 2016
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Israel's net assets abroad (the surplus of assets over liabilities) increased by $10.6 billion
(12.4 percent) in the third quarter of 2016, to around $96 billion at the end of September.
An increase of $125.4 billion (4.3 percent) in the value of Israelis’ assets abroad was partly
offset by an increase of $4.8 billion (1.8 percent) in the value of Israeli’s liabilities to
nonresidents (Figure 1).
The increase in the gross value of assets abroad was mainly the result of net direct
investments by Israelis in foreign share capital. The increase in the gross value of liabilities
to nonresidents was mainly the result of net investments by nonresidents in financial share
capital and direct investments.
Bank of Israel - Israel’s International Investment Position (IIP), Third Quarter of 2016
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The value of Israel's assets abroad increased in the third quarter of 2016 by about $15.4
billion (4.3 percent), to about $376 billion at the end of September, mainly as a result of
direct investments in share capital abroad totaling about $7.6 billion, and an increase in the
prices of financial shares abroad held by Israeli residents totaling about $3.1 billion.
The value of the financial investments portfolio increased by $4.6 billion (4.1 percent) in
the third quarter. An increase of $3.1 billion (5.3 percent) in the prices of foreign shares
held by Israelis was accompanied by an increase of $1.1 billion (2 percent) in the prices of
foreign bonds held by Israelis. In addition, there were net investments in foreign bonds
totaling about $480 million.
The value of direct investments abroad increased by about $8.8 billion (9.6 percent) in
the third quarter, mainly as a result of the flow of investments in share capital totaling about
$7.6 billion (9.4 percent), investment that was mostly made by one company in the
pharmaceuticals industry.
The value of other investments abroad increased in the third quarter by $140 million (0.2
percent), mainly due to net deposits with Israeli banks abroad and net investments in
customer loans and credit, which were mostly offset by net withdrawals from Israelis’
deposits abroad.
The value of the foreign exchange reserves increased by about $1.8 billion (1.9 percent)
in the third quarter, mainly due to foreign exchange purchases by the Bank of Israel.
The composition of residents' securities portfolio abroad: During the third quarter of
2016, there was an increase in the proportion of direct investments, further to an increase in
this proportion in the five previous quarters. In contrast, there was a decline in the
proportion of bank deposits abroad, foreign bonds, and credit (Figure 2).
Bank of Israel - Israel’s International Investment Position (IIP), Third Quarter of 2016
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The balance of Israel's liabilities to abroad increased in the third quarter of 2016 by
about $4.8 billion (1.8 percent), to about $280 billion at the end of September.
The value of direct investments in the economy increased by $2.6 billion (2.4 percent) in
the third quarter, derived mainly from the flow of direct investments in Israeli share capital
($2.8 billion, 3 percent)
The value of financial investments (stocks and bonds) increased by about $2.8 billion
(2.4 percent) in the third quarter, mainly net investment by nonresidents in Israeli share
capital ($4.4 billion, 5 percent) in one company in the pharmaceuticals industry, which was
offset by a decline in the prices of Israeli shares held by nonresidents ($2.1 billion, 2.3
percent).
The value of other investments declined by about $600 million (1.2 percent) in the third
quarter, mainly due to net realizations of credit ($270 million, 1.5 percent), a decline in
loans ($225 million, 1.3 percent), and net withdrawals by nonresidents from Israeli deposits
($190 million, 1.6 percent).
The value of nonresidents' financial portfolio on the Tel Aviv Stock Exchange
increased in the third quarter by $1.7 billion (5 percent), to about $35.8 billion at the end of
September, following a decline of $3.7 billion in the second quarter. Most of the increase
was due to an increase in the value of the balance of shares held by parties at interest
(Figure 3).
Bank of Israel - Israel’s International Investment Position (IIP), Third Quarter of 2016
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The gross external debt
Israel's gross external debt declined by about $620 million (1 percent) in the third quarter
of 2016 to about $91 billion. The decline mainly reflects net realizations of credit and
loans, and net withdrawals from nonresidents’ deposits.
The ratio of gross external debt to GDP declined in the third quarter, to 28.2 percent at
the end of September. The decline was a result of the decline in the shekel value of gross
external debt (3 percent), which was greater than the increase in GDP (2%). The decline in
the shekel value of the gross external debt was a result of net realizations of debt
instruments (1 percent) and the appreciation of the shekel in the third quarter (2 percent)
(Figure 4).
Bank of Israel - Israel’s International Investment Position (IIP), Third Quarter of 2016
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The net external debt
The surplus of assets over liabilities abroad in debt instruments alone (negative net
external debt) increased by about $4.6 billion (3.8 percent) in the third quarter, to about
$125 billion at the end of September (Figure 5).
The balance of short-term debt assets (repayment/realization within a year) was about
$145 billion at the end of September, mostly in the Bank of Israel’s foreign exchange
reserves, reflecting a coverage ratio of 3.9 times short-term debt.
Bank of Israel - Israel’s International Investment Position (IIP), Third Quarter of 2016
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Bank of Israel - Israel’s International Investment Position (IIP), Third Quarter of 2016
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