Israelis held $190.3 billion in assets overseas at the end of March 2008, $2 billion more than at the end of 2007, the Bank of Israel reports.
Direct investment overseas grew by 4%, or $2 billion, during the first quarter, to $47.8 billion, but portfolio investment fell by 5%, or $2 billion to $43 billion, mainly due to falling prices in foreign financial markets. The balance of other investment, which includes mainly deposits and credit, grew by 2%, or $1 billion to $69.7 billion, mainly as a result of the banking sector's increased deposits abroad. (Reserve assets rose to $30 billion).
Israel's external liabilities totaled $204.9 billion at the end of March, 1%, or $2 billion, less than at the end of 2007. Nonresidents’ direct investment grew by $2 billion during the first quarter to $61.8 billion, but portfolio investment fell by $3 billion to $85.1 billion, due to disinvestment coupled with a fall in Israeli share prices that was partly offset by the strengthening of the shekel.
Taken together, Israel's net balance of external liabilities (the balance of nonresidents’ assets in Israel minus the balance of Israeli residents' assets abroad) totaled $14.5 billion at the end of March, 23%, or $4 billion, less than at end of 2007. The decline in net liabilities was expressed by both an increase in assets of residents held abroad as well as a decline in the economy's external liabilities. First quarter 2008 activity was marked by falling financial markets in Israel and abroad and by the appreciation of the shekel relative to other major currencies.
Israel's gross external debt decreased by 0.7%, or $600 million during the first quarter to $89 billion at the end of March, mainly due to the decrease in public sector debt and to a lesser extent a decrease in non-bank external debt.
Published by Globes [online], Israel business news - www.globes-online.com - on June 18, 2008
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