The Bank of Israel has released its data on the balance of assets and the balance of debt held by Israelis abroad for the second quarter of 2021.
In the second quarter of 2021, the balance of assets held abroad by Israeli residents increased by approximately $36 billion (6 percent), to about $666 billion at the end of June. The increase derived mainly from growth in the foreign securities portfolio and in reserve assets.
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Outstanding liabilities to abroad increased by approximately $46 billion (11 percent) in the second quarter, to about $480 billion at the end of the quarter. The increase derived primarily from net investment by nonresidents totaling $15 billion and from price increases of $10 billion in the portfolio of Israeli securities.
Israel’s surplus of assets over liabilities vis-à-vis abroad in the second quarter decreased by approximately $10 billion (5.2 percent), to about $186 billion at the end of the quarter.
The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone (negative net external debt) increased by $9 billion (5 percent) during the second quarter, to approximately $211 billion at quarter end.
The ratio of gross external debt to GDP decreased by 0.1 percentage points during the course of the second quarter, to 33.5 percent at the end of June. The decline in the debt to GDP ratio reflected an increase of 5.4 percent in the balance of external debt and an increase of 5.6 percent in GDP (in dollar terms).
Table 1: Asset and liability balances, and changes in them
1. The balance of Israel’s assets abroad
In the second quarter of 2021, the value of the assets held abroad by Israeli residents increased by about $36 billion (6 percent) to about $666 billion at the end of June.
The increase in the balance derived mainly from an increase in the value of the foreign securities portfolio and growth in reserve assets.
2. Israel’s liabilities to abroad
The balance of Israel’s liabilities to abroad increased by about $46 billion (11 percent) in the second quarter, to about $480 billion at the end of the quarter. The increase derived mainly from $15 billion in net investments and by an increase in prices of Israeli securities of about $10 billion.
The value of other investments in the economy increased by about $4 billion (7 percent) in the second quarter, to $58 billion. The increase in the balance was mainly due to growth in suppliers’ credit of about $2 billion.
The balance of liabilities in debt instruments alone, which makes up Israel’s gross external debt, increased by about $8 billion (5 percent) in the second quarter, to $148 billion, mainly as a result of net investment in bonds and growth in suppliers’ credit.
The ratio of gross external debt to GDP decreased by 0.1 percentage points during the course of the second quarter, to 33.5 percent at the end of June. The decrease in the debt to GDP ratio reflected an increase of 5.4 percent in the balance of external debt as opposed to an increase of 5.6 percent in GDP (in dollar terms). (Figure 4)
3. Israel’s surplus assets over liabilities vis-à-vis abroad
An increase in outstanding liabilities that was greater than an increase in outstanding assets led to a decrease of $10 billion (5.2 percent) in surplus assets over liabilities vis-à-vis abroad, which totaled about $186 billion at the end of June (Figure 5).
4. Net external debt
The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone (negative net external debt) increased by $9 billion (5 percent) during the second quarter, to $211 billion at the end of June (Figure 6).
The balance of short-term debt assets (maturity/realization within a year) increased in the second quarter by $17 billion, to $359 billion at the end of the quarter, of which $200 billion is the Bank of Israel’s foreign exchange reserves. This reflects a coverage ratio of 4.5 times short-term debt.
