Israel’s International Investment Position (IIP), second quarter of 2020

  • In the second quarter of 2020, the balance of assets held abroad by Israeli residents increased by approximately $47 billion (9.9 percent), to about $523 billion at the end of June. The increase derived mostly from a sharp rise in the prices of assets, mostly equities, ($22.3 billion) in the foreign securities portfolio. In addition, in the second quarter there was an increase in reserves assets ($16.5 billion) and investments in tradable securities ($11.7 billion), which were partly offset by withdrawals from Israeli banks’ deposits abroad.
  • Outstanding liabilities to abroad increased by approximately $33 billion (10.1 percent) in the second quarter, to about $358 billion at the end of the quarter. The increase derived primarily from rises in prices of Israeli equities held by nonresidents ($17.5 billion) and from nonresidents’ investments in Israeli government foreign-currency bonds ($12.5 billion).
  • In the second quarter, nonresidents purchased an Israeli company in the semiconductor industry—a direct investment of approximately $6 billion. As most of the company’s shares (before the acquisition) were held by nonresident financial investors, the capital inflow in respect of the investment was mostly offset by the realization of the nonresidents’ financial investment in shares, and did not impact on the domestic market.
  • Israel’s surplus of assets over liabilities vis-à-vis abroad increased by approximately $14.5 billion (9.6 percent) in the second quarter, to about $165 billion at the end of June.
  • The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone (negative net external debt) increased by $12 billion (7.1 percent) during the second quarter, to approximately $180 billion at the end of June.
  • The ratio of gross external debt to GDP increased by about 2.8 percentage points during the course of the second quarter, to 29.1 percent at the end of June. The increase in the debt to GDP ratio reflected a rate of increase in the balance of gross external debt compared to the contraction of GDP (in dollar terms).​