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For more information on this release:
E-mail: nat_acc@cso.ie Michael Connolly (+353) 1 498 4006 Mary Brew (+353) 1 498 4365
For general information on CSO statistics:
information@cso.ie (+353) 21 453 5000 Visit StatCentral.ie, the portal to Ireland's official statistics On-line ISSN 2009-5600
CSO statistical release, 03 October 2016, 11am

Quarterly Institutional Sector Accounts Non-Financial

Quarter 2 2016

 Seasonally Adjusted Gross Household Saving by Component
 Gross Disposable IncomeFinal Consumption ExpenditureGross Saving
 (B.6g+D.8)(P.3)(B.8g)
Q1 201624,63422,5992,036
Q2 201624,82822,3112,518
   €million

Household Saving Ratio increased in Q2 2016

Gross Household Savings Ratio Seasonally Adjusted Q1 2015 – Q2 2016
go to full release

The quarterly gross disposable income of households (B.6g) increased by €194m to €24,828m in the second quarter of 2016 (see table above).  Household expenditure (P.3) decreased by €288m to €22,311m over this same period.  Gross household saving (B.8g), therefore, increased by €482m in the quarter. 

The derived gross saving ratio, which expresses saving as a percentage of gross disposable income, increased from 8.3 per cent in the first quarter of 2016 to 10.1 per cent in the current quarter (see Background Notes - definitions).

Decreased Saving for the Overall Economy in Q2 2016

Gross saving for the total economy (S.1) decreased slightly, when compared to the same quarter last year, from €21,849m in Q2 2015 to €21,777m in Q2 2016 (see Summary Table).   The gross saving of households decreased by €128m over this period and financial corporations also saw a fall in saving.  However, the saving of Government and non-financial corporations improved between Q2 2015 and Q2 2016.

 

The seasonally adjusted data series which includes Gross Disposable Income, Personal Consumption of Goods and Services and Gross Savings of the Household and NPISH sector is available at www.cso.ie/shorturl.aspx/99. The entire unadjusted series for all variables published in this release are also available at the same link. See Background Notes for definitions of the terms used. These estimates are preliminary and will be subject to revision.

 

Increase in Net Lending of Government (S.13)

Gross saving of Government was €1,890m in the second quarter of 2016, an improvement of €1,046m on the Q2 2015 surplus of €844m. An increase of €522m in taxes paid on production and imports (D.2) and an increase of €627m in taxes on income and wealth (D.5) were the main contributors to the change in gross saving.

On the capital side of the accounts, an increase of €951m in gross capital formation (P.5) taken together with the improvement in saving of €1,046m resulted in a slight increase in the lending (B.9) of Government, from €108m in Q2 2015 to €157m in Q2 2016.

Non-Financial (S.11) and Financial (S.12) Corporations

The gross saving of non-financial corporations was €15,709m in Q2 2016 – an increase of €558m compared with the Q2 2015 figure of €15,151m.

Net property income (D.41) increased by €1,816m due to reduced dividend payments. This was offset by a decrease of €1,012m in in the gross operating surplus (B.2g) of the non-financial corporations. Net lending by this sector in Q2 2016 has decreased by €1,695m compared to €3,458m in the same period in 2015. An increase of €1,361m in gross capital formation (P.5) and an increase of €952m in acquisitions less disposals of non-produced assets (NP) contributed to the change.

Financial corporations had gross saving of €663m in Q2 2016, a decrease of €1,549m on Q2 2015 with a decrease of €1,342m in net property income being the main reason for the decrease in saving. Net lending (B.9) decreased by €1,632m to €168m in Q2 2016.   

Rest of the World Sector (S.2)

The net borrowing (B.9) by the rest of the world from Ireland amounted to €3,405m in Q2 2016 compared with a net borrowing of €7,231m in Q2 2015. The net borrowing position reflects the level of gross saving in the Irish economy.

1The components of D.4 are interest, dividends, reinvested earnings on foreign direct investment, other investment income and rent.

Gross Disposable IncomePCESaving
2015Q147.722979441315221.347298915932626.3756805253826
2015Q251.478610367445921.674537354924629.8040730125213
2015Q348.580342537610621.993167395065326.5871751425452
2015Q452.861235176116422.247030566482330.6142046096341
2016Q152.287590285442522.598788645976329.6888016394662
2016Q252.59746501324622.310598746924130.2868662663219
Table 1: Quarterly Accounts by Institutional Sector, Q1 2014 - Q2 2016 Summary€million
  Key VariablesQuarterS.2 Rest of WorldS.1 Total EconomyS.1N Not SectorizedS.11 Non-Financial CorporationsS.12 Financial CorporationsS.13 General GovernmentS.14+S.15 Households including NPISH
(a)B.1*gGross Domestic ProductQ1 2014 44,9504,09725,5003,6755,7535,925
   Q2 2014 46,6843,24927,5323,7445,6536,507
   Q3 2014 51,1584,40129,7634,1355,4677,392
   Q4 2014 50,3673,87330,3634,2905,4066,435
   2014 193,16015,621113,15715,84322,27926,260
   Q1 2015 61,5094,95539,9553,7955,9606,843
   Q2 2015 61,3764,06840,9413,6375,8586,872
   Q3 2015 64,0905,46542,3753,6975,6666,887
   Q4 2015 68,8404,51447,0184,2105,6047,495
   2015 255,81519,002170,29015,33923,08828,096
   Q1 2016 62,4335,51740,3553,5046,1466,911
   Q2 2016 61,6994,40140,8703,6396,0406,749
           
(b)B.2g/B.3gGross Operating Surplus Q1 2014 21,405-44514,3231,7889844,755
  / Mixed IncomeQ2 2014 24,142-46216,0852,0879845,449
   Q3 2014 27,471-50718,2402,4549846,300
   Q4 2014 27,691-49918,3882,4719846,347
   2014 100,710-1,91367,0368,8003,93522,852
   Q1 2015 36,6833728,0901,8501,0535,652
   Q2 2015 37,5473728,7131,9151,0535,828
   Q3 2015 38,9503929,7222,0191,0536,117
   Q4 2015 44,9154234,0002,4691,0537,351
   2015 158,095155120,5268,2544,21424,947
   Q1 2016 36,2873827,7831,8101,1115,545
   Q2 2016 36,1553727,7011,7971,1105,510
           
(c)D.1_D.4Net Primary IncomeQ1 2014 16,1410-7,3945483,80319,186
   Q2 2014 14,6000-9,0173944,00919,213
   Q3 2014 15,8700-7,5564493,89419,083
   Q4 2014 17,1680-6,0541613,15919,901
   2014 63,7800-30,0211,55314,86577,383
   Q1 2015 10,1310-14,251-274,32120,088
   Q2 2015 13,8780-11,6788274,47620,254
   Q3 2015 11,3040-13,7851494,47820,462
   Q4 2015 10,4800-14,3734383,36921,046
   2015 45,7930-54,0881,38716,64481,850
   Q1 2016 15,0130-9,242-1,0984,35021,003
   Q2 2016 16,0670-9,863-5164,77721,668
           
(d)B.5gGross National Income = (b + c)Q1 2014 37,546-4456,9292,3354,78623,941
   Q2 2014 38,743-4627,0682,4814,99324,662
   Q3 2014 43,342-50710,6832,9044,87825,383
   Q4 2014 44,859-49912,3342,6324,14326,248
   2014 164,490-1,91337,01510,35318,800100,235
   Q1 2015 46,8143713,8391,8245,37425,740
   Q2 2015 51,4253717,0352,7415,52926,082
   Q3 2015 50,2543915,9372,1685,53126,579
   Q4 2015 55,3954219,6272,9074,42228,397
   2015 203,88815566,4379,64120,857106,797
   Q1 2016 51,3003818,5417125,46126,548
   Q2 2016 52,2223717,8381,2815,88727,178
           
(e)D.5_D.7Net Current TransfersQ1 2014 -8990-3724721,077-2,076
   Q2 2014 -6040-1,3311972,694-2,163
   Q3 2014 -5260-9163292,246-2,185
   Q4 2014 -7020-1,7911284,371-3,410
   2014 -2,7300-4,4101,12710,388-9,835
   Q1 2015 -8930-6214781,555-2,305
   Q2 2015 -7230-1,884933,190-2,122
   Q3 2015 -5020-1,1123242,758-2,471
   Q4 2015 -1,0090-2,621-646,321-4,645
   2015 -3,1270-6,23983113,824-11,543
   Q1 2016 -6590-6954542,299-2,717
   Q2 2016 -5770-2,129214,311-2,780
           
(f)B.6gGross Disposable Income = (d + e)Q1 2014 36,648-4456,5572,8085,86321,864
   Q2 2014 38,139-4625,7372,6787,68722,499
   Q3 2014 42,816-5079,7683,2337,12423,198
   Q4 2014 44,158-49910,5432,7608,51422,839
   2014 161,760-1,91332,60511,48029,18890,400
   Q1 2015 45,9213713,2182,3026,93023,435
   Q2 2015 50,7013715,1512,8348,71923,960
   Q3 2015 49,7533914,8252,4928,28924,108
   Q4 2015 54,3864217,0062,84310,74423,752
   2015 200,76115560,19910,47134,68295,254
   Q1 2016 50,6403817,8461,1667,76023,831
   Q2 2016 51,6453715,7091,30210,19824,398
           
(g)P.3+D8Use of Disposable IncomeQ1 2014 -27,59100-552-7,418-19,621
   Q2 2014 -27,88600-559-7,887-19,439
   Q3 2014 -28,36700-569-8,333-19,465
   Q4 2014 -30,39500-584-8,036-21,774
   2014 -114,24000-2,265-31,674-80,301
   Q1 2015 -28,97300-629-7,692-20,652
   Q2 2015 -28,85200-623-7,875-20,354
   Q3 2015 -29,72700-621-8,345-20,760
   Q4 2015 -31,80900-629-8,188-22,992
   2015 -119,36200-2,503-32,101-84,757
   Q1 2016 -30,66800-632-8,080-21,956
   Q2 2016 -29,86800-639-8,308-20,920
           
(h)B.8gGross Saving = (f+g)Q1 2014 9,056-4456,5572,255-1,5542,243
   Q2 2014 10,253-4625,7372,119-2003,060
   Q3 2014 14,448-5079,7682,664-1,2093,732
   Q4 2014 13,763-49910,5432,1764781,064
   2014 47,520-1,91332,6059,214-2,48610,099
   Q1 2015 16,9483713,2181,673-7632,783
   Q2 2015 21,8493715,1512,2118443,606
   Q3 2015 20,0263914,8251,871-563,348
   Q4 2015 22,5774217,0062,2142,555760
   2015 81,39915560,1997,9692,58010,497
   Q1 2016 19,9723817,846534-3201,875
   Q2 2016 21,7773715,7096631,8903,478
           
(i) Changes in Capital AccountsQ1 2014 -4,631-445-3,426-67-449-242
   Q2 2014 -3,109-462-1,680-61-422-484
   Q3 2014 -5,761-507-4,841-82-43-288
   Q4 2014 -6,690-499-5,143-111-354-582
   2014 -20,190-1,913-15,091-321-1,269-1,597
   Q1 2015 2,634373,784-100-683-403
   Q2 2015 763371,260-159172-547
   Q3 2015 1,972392,541-17654-486
   Q4 2015 -306421,5511,932-3,197-633
   2015 5,0631559,1361,496-3,655-2,069
   Q1 2016 2,128382,959-86-145-637
   Q2 2016 -2,79737-863-240-775-956
           
(j)P.51CConsumption of Fixed Capital1Q1 2014 7,609 5,3562278581,168
   Q2 2014 7,681 5,4142298581,180
   Q3 2014 7,757 5,4742328581,193
   Q4 2014 7,845 5,5432358581,208
   2014 30,891 21,7879223,4334,749
   Q1 2015 15,358 12,9332519071,267
   Q2 2015 15,379 12,9522529071,268
   Q3 2015 15,400 12,9712529071,270
   Q4 2015 15,422 12,9902529071,272
   2015 61,558 51,8471,0073,6275,077
   Q1 2016 15,513 13,0262539581,276
   Q2 2016 15,576 13,0832549581,281
           
(k)B.9Net Lending(+)/Net Borrowing(-)Q1 20143,184-3,183-890-2,2251,961-2,862833
  = (h + i) - jQ2 2014537-537-925-1,3561,829-1,4811,396
   Q3 2014-930931-1,013-5472,350-2,1102,251
   Q4 2014773-771-997-1431,831-735-726
   20143,564-3,561-3,825-4,2727,971-7,1873,753
   Q1 2015-4,2224,224754,0681,321-2,3531,113
   Q2 2015-7,2317,233743,4581,8011081,791
   Q3 2015-6,5996,598784,3951,443-9091,591
   Q4 2015-6,8496,849835,5673,894-1,549-1,146
   2015-24,90124,90431017,4888,458-4,7023,350
   Q1 2016-6,5876,587767,778195-1,423-38
   Q2 2016-3,4053,404751,7641681571,241
1The previous estimation of quarterly consumption of fixed capital (CFC) has been revised. See Background Notes for further information.
Quarterly Accounts by Institutional Sector, Q2 2016€million
USESCURRENT ACCOUNTSRESOURCES
S.14+S.15 Households including NPISHS.13 General governmentS.12 Financial CorporationsS.11 Non-Financial CorporationsS.1N Not SectorizedS.1 Total EconomyS.2 Rest of WorldS.1+S.2 Sum Over SectorsS.1+S.2 Sum Over SectorsS.2 Rest of WorldS.1 Total EconomyS.1N Not SectorizedS.11 Non-Financial CorporationsS.12 Financial CorporationsS.13 General governmentS.14+S.15 Households including NPISH
1.2 GENERATION OF INCOME ACCOUNT
        B.1*gGross Domestic Product  61,6994,40140,8703,6396,0406,749
1,2384,9301,61212,774 20,55413020,684D.1Compensation of Employees        
11802315204,5805,449 5,449D.2Taxes on Production and Imports, paid        
        D.3Subsidies, received458 45821712400117
5,5101,1101,79727,7013736,155  B.2g/ B.3gGross Operating Surplus/ Mixed Income        
1.3 ALLOCATION OF PRIMARY INCOME ACCOUNT
        B.2g/ B.3gGross Operating Surplus/ Mixed Income  36,1553727,7011,7971,1105,510
        D.1Compensation of Employees20,68415520,529    20,529
        D.2Taxes on Production and Imports, received5,449645,385   5,385 
 397   39761458D.3Subsidies, paid        
3741,54716,52113,048 31,49117,64949,140D.4Property Income49,14027,09822,041 3,18616,0061,3361,513
3231,5473,7031,519 7,0929,48016,572D.41 Interest16,5725,16611,406 -13111,15494289
002,1946,378 8,5724,09712,669D.42 Distributed Income of Corporations12,6686,5436,125 2713,8261,241787
006335,151 5,7843,4489,232D.43 Reinvested earnings on direct foreign investment9,2335,7853,448 3,04540200
009,9920 9,99262410,616D.44 Other investment income10,6159,6041,011 06240387
51001 52 52D.45 Rent52 52 00151
27,1785,8871,28117,8383752,222  B.5gGross National Income        
Quarterly Accounts by Institutional Sector, Q2 2016€million
USESCURRENT ACCOUNTSRESOURCES
S.14+S.15 Households including NPISHS.13 General governmentS.12 Financial CorporationsS.11 Non-Financial CorporationsS.1N Not SectorizedS.1 Total EconomyS.2 Rest of WorldS.1+S.2 Sum Over SectorsS.1+S.2 Sum Over SectorsS.2 Rest of WorldS.1 Total EconomyS.1N Not SectorizedS.11 Non-Financial CorporationsS.12 Financial CorporationsS.13 General governmentS.14+S.15 Households including NPISH
1.5 SECONDARY DISTRIBUTION OF INCOME ACCOUNT
        B.5gGross National Income  52,2223717,8381,2815,88727,178
4,71905921,994 7,305197,324D.5Current Taxes on Income, Wealth, etc.7,324147,310   7,310 
4,278    4,27804,278D.61 Social contributions4,27804,278 01,3842,8940
05,5407450 6,284806,364D.62 Social benefits other than social transfers in kind6,364826,282    6,282
1,3004121,962235 3,9119474,858D.7Other Current Transfers4,8581,5273,331 1011,937591,234
24,39810,1981,30215,7093751,645  B.6gGross Disposable Income        
1.6 USE OF DISPOSABLE INCOME ACCOUNT
        B.6gGross Disposable Income  51,6453715,7091,30210,19824,398
21,5608,308   29,868  P.3Final Consumption Expenditure        
  639  6390639D.8Adjustment for the Change in Pension Entitlements6390639    639
3,4781,89066315,7093721,777  B.8gGross Saving        
1.7 EXTERNAL ACCOUNT
 77,898 P.6Exports of Goods and Services        
        P.7Imports of Goods and Services 63,203      
      -14,695 B.11External Balance of Goods and Services        
     80,30818,88699,194D.1 to D.8Primary Incomes and Current Transfers99,19428,94070,253     
      -4,641 B.12Current External Balance        
Quarterly Accounts by Institutional Sector, Q2 2016€million
CHANGES IN ASSETSCAPITAL ACCOUNTSCHANGES IN LIABILITIES
S.14+S.15 Households including NPISHS.13 General governmentS.12 Financial CorporationsS.11 Non-Financial CorporationsS.1N Not SectorizedS.1 Total EconomyS.2 Rest of WorldS.1+S.2 Sum Over SectorsS.1+S.2 Sum Over SectorsS.2 Rest of WorldS.1 Total EconomyS.1N Not SectorizedS.11 Non-Financial CorporationsS.12 Financial CorporationsS.13 General governmentS.14+S.15 Households including NPISH
1.8 CHANGES IN NET WORTH DUE TO SAVING AND CAPITAL TRANSFERS ACCOUNT
B.8gGross Saving  21,7773715,7096631,8903,478
        B.12Current External Balance -4,641      
74395046 51545560D.9Capital Transfers5600560 2000165195
1,28195825413,083 15,576  P.51CConsumption of Fixed Capital        
2,3187024092,780376,246-4,6861,560B.10.1Changes in Net Worth due to Saving and Capital Transfers        
1.9 ACQUISITION OF NON-FINANCIAL ASSETS ACCOUNT
        B.10.1Changes in Net Worth due to Saving and Capital Transfers1,560-4,6866,246372,7804097022,318
2,3581,50349412,818-3717,137 17,137P.5Gross Capital Formation        
        P.51CConsumption of Fixed Capital15,576 15,576 13,0832549581,281
0001,281 1281-12810NPAcquisitions less Disposals of Non-Produced Assets        
1,2411571681,764753,404-3,405-1B.9Net Lending (+) / Net Borrowing (-)        

Background Notes

Description of Institutional Sectors

In the sector accounts, Institutional Sectors are distinguished not in terms of the nature of their production activity (such as agriculture, industry, services, etc.) but rather in terms primarily of the institutional form of the units that make them up. Thus companies, whether engaged in commercial non-financial or financial business, are grouped in a different sector from households, even though the latter are in many cases also engaged in commercial production, and from government or other non-market producers such as voluntary agencies.

Institutional Sectors

The classification system is that of the European System of Accounts 2010 (ESA2010). The sectors and sub-sectors distinguished in the present publication are as follows:

S.1 Resident Economy is the sum of all the sectors of the domestic economy.

S.11 Non-Financial Corporations are corporate bodies producing goods and non-financial services on a commercial basis. They include public limited companies, private companies and other corporate forms of business, whether owned by residents (including the government) or non-residents or both. In particular, therefore, Irish subsidiaries of foreign companies and the Irish branches of foreign companies operating in Ireland on a branch basis are included; while the foreign subsidiaries of Irish companies and the foreign branches of Irish companies operating abroad are excluded (they form part of the Rest of the World sector S.2). The business activities of self-employed persons (quasi-corporations) are in principle to be included here if separate accounts are available for statistical purposes. Under the implementation of ESA2010, entities which operate as holding companies for non-financial corporations are now classified in the financial sector.

S.12 Financial Corporations are corporate bodies producing financial services on a commercial basis. As with S.11, they can take various legal forms, with a range of ownership arrangements. They include monetary financial institutions, other financial intermediaries, financial auxiliaries and insurance corporations and pension funds.

S.13 General Government consists of central and local government. Central government includes the Ireland Strategic Investment Fund (formerly the NPRF), and non-commercial agencies owned and funded by government, but does not include commercial state-owned companies (which are proper to S.11 or S.12 as appropriate).

S.14 + S.15 Households and Non-Profit Institutions Serving Households. S.14 consists of persons in their capacity as holders of financial assets or as borrowers. The business assets and liabilities of unincorporated self-employed persons are also mainly reflected in this sector. S.15 consists of non-profit institutions such as charities, and non-commercial agencies not owned by the government, such as some schools and hospitals.

S.2 Rest of the World. The figures represent the economy’s transactions with non-residents. The conceptual definition is the same as in the Balance of Payments (BOP) statistics. In particular, non-residents include foreign subsidiaries of Irish companies, the foreign branches of Irish companies that operate abroad on a branch basis, and the head offices of foreign companies that operate in Ireland on a branch basis.

S.1N Not Sectorised. In the non-financial accounts an additional residual sector is used to report taxes and subsidies in the Generation of Income Account (Account 1.2) as it is not possible to allocate these amounts to Institutional Sectors. In addition, throughout these accounts S.1N is used to report the amounts that appear as the statistical discrepancy in the National Income and Expenditure GDP accounts, arising from the use of two independent estimates of GDP (from the Income and Expenditure approaches). In the Annual National Accounts NIE tables 3 and 5, the official estimate of GDP is reported as the average of the two measures, and the discrepancy is therefore displayed as half the difference between the two independent estimates (and thus with different signs in the two tables). The discrepancy is projected forward on a quarterly basis in line with the trends in the Expenditure components and is presented in Table 2 of the Quarterly National Accounts. In the quarterly sector accounts it appears in Gross Domestic Product, the opening item in the Generation of Income Account and is then carried through successive accounts via the balancing item. In the final non-financial account, the full amount of the discrepancy then emerges as the unallocated net lending or borrowing in the economy.

Description of Detailed Non-Financial Accounts

Sector accounts present a coherent overview of all economic processes and the roles played by the various sectors. Each economic process is described in a separate account. The accounts describe successively generation of income, primary and secondary income distribution, final consumption, redistribution by means of capital transfers and capital formation. Note that the Production Account (1.1) from the Annual Accounts is not included in these quarterly accounts as the data is not available on a quarterly basis.  The accounts record economic transactions, distinguishing between uses and resources, (e.g. the resources side of the transaction category Interest (D.41) records the amounts of interest receivable by the different sectors of the economy and the uses side shows interest payable) with a special item to balance the two sides of each account. By passing on the balancing item from one account to the next a connection is created between successive accounts.

The accounts are compiled for the total economy and include accounts for separate domestic sectors and the Rest of the World sector. In this way the sector accounts describe:

  • for each economic process the role of each sector, for instance General Government in income redistribution and Financial Corporations in financing.
  • for each sector all economic transactions and their relation with other domestic sectors and the Rest of the World.

The successive accounts are explained in more detail below. 

Current Accounts:

1.1 Production Account

This account is not presented in the Quarterly Non-Financial Accounts as quarterly data is not available.

1.2 Generation of Income Account

This account displays the transactions through which Gross Domestic Product at market prices is distributed to labour (compensation of employees), capital (operating surplus) and government (the balance of taxes and subsidies on production). The balancing item for the Household and NPISH sector in this account is called mixed income, because apart from operating surplus it also contains compensation for work by self-employed persons and their family members. Gross Operating Surplus/Gross Mixed Income (B.2g/B.3g) is the balancing item for the entire account.

1.3 Allocation of Primary Income Account

This account records, as resources, the income from direct participation in the production process, as well as property income received in exchange for the use of land, financial resources and other intangible assets. In addition, this account records the taxes on production and imports received by the government. On the uses side, property income is recorded as well as the subsidies paid by the government.

On this account the interest paid and received are recorded excluding imputed bank services (financial intermediation services indirectly measured - FISIM). In the national accounts insurance technical reserves are seen as a liability of insurance enterprises and pension funds to policyholders. Therefore, the receipts from investing these reserves are recorded as payments from insurance enterprises and pension funds to households, under Other Investment Income (D.44). The balancing item of this account for each sector is Gross National Income (B.5g). The Primary Income for the total economy is the National Income.

1.4 Memorandum-Entrepreneurial Income Account

This account is not presented in the Quarterly series.

1.5 Secondary Distribution of Income Account

The Secondary Distribution of Income account shows how primary income is redistributed by means of current taxes on income and wealth, social contributions (including contributions to pension schemes), social benefits (including pension benefits) and other current transfers. The balancing item of this account is Gross Disposable Income (B.6g). For the consuming sectors (Households, NPISH and General Government) this item is passed on to Use of Disposable Income Account (1.6). For the other sectors the disposable income is generally equal to saving. This is then passed on to the Change in Net Worth due to Saving and Capital Transfers Account (1.8).

1.6 Use of Disposable Income Account

This account shows the element of disposable income that is spent on final consumption and also the element that is saved. As mentioned above final consumption only exists for Households, NPISH and General Government. The net equity of Households in pension funds is seen as a financial asset that belongs to Households. Changes in these reserves need to be included in the saving of Households. However, contributions to pension schemes and pension benefits have already been recorded on Secondary Distribution of Income Account (1.5) as social contributions and social benefits. Therefore, an adjustment is needed in the saving of Households to include the change in pension funds reserves on which they have a definite claim. This adjustment is called Adjustment for the Change in Pension Entitlements (D.8). There is no need for a similar adjustment concerning life insurance because life insurance premiums and benefits are not recorded as current transactions. The balancing item for this account is Gross Saving (B.8g).

1.7 External Account

This account records the summarised transactions of the Rest of the World Sector (S.2), including on the uses side exports of goods and services, primary incomes and current transfers receivable. The resources side of this account includes imports of goods and services together with primary incomes and transfers payable. The balancing item is Current External Balance (B.12), which records the balance on current accounts with the Rest of the World.

Capital Accounts:

1.8 Change in Net Worth due to Saving and Capital Transfers

On this account the capital transfers are recorded and combined with gross saving and the current external balance. The resulting balancing item is Changes in Net Worth due to Saving and Capital Transfers (B.10.1).

1.9 Acquisition of Non-Financial Assets Account

On this account, Gross Fixed Capital Formation (P.5), Changes in Inventories and Acquisitions less Disposals of Valuables and Non-Produced Non-Financial Assets (NP) are recorded among the uses. The decline in the value of fixed capital goods caused by consumption of fixed capital goods is recorded among the resources (P.51C). The balancing item is Net Lending(+) or Borrowing(-) (B.9). It shows the amount a sector can lend/invest or has to borrow as a result of its current and capital transactions.

Seasonal Adjustment

Seasonally adjusted estimates of Household Saving are compiled using the indirect seasonal adjustment approach. Under this approach the two main aggregates, Household Disposable Income (B.6g + D.8) and Final Consumption Expenditure of Households (P.3), are independently adjusted. In the case of Household Saving (B.8g), however, this estimate is derived by taking the difference between the two adjusted series of Household Disposable Income and Final Expenditure of Households. This method for estimating the seasonally adjusted value for a small net residual of two large aggregates, such as Household Saving is considered to be a more appropriate estimation procedure.

As part of the seasonal adjustment process, ARIMA models are identified for each series based on unadjusted data spanning Q1 1999 to Q2 2016. These models are then applied to the entire series (Q1 1999 to Q2 2016). Seasonal factors and the parameters of the ARIMA models are updated each quarter.

The adjustments are completed by applying the X-13-ARIMA model, developed by the U.S. Census Bureau to the unadjusted data. This methodology estimates seasonal factors while also taking into consideration factors that impact on the quality of the seasonal adjustment such as, for example:

  • calendar effects, e.g. the timing of Easter
  • outliers, temporary changes and level shifts in the series

For additional information on the use of X-13-ARIMA, see https://www.census.gov/srd/www/x13as/.

Definition of Household Saving Ratio

The Household Saving Ratio is Gross Household Saving (B.8g) expressed as a percentage of total resources, i.e. the sum of Gross Household Disposable Income (B.6g) and the Adjustment for the Change in Pension Entitlements (D.8). Household Saving in the relevant quarter represents that part of Disposable Income that is not spent on Final Consumption of Goods and Services (P.3).  The use of these savings either for financial investment or debt reduction is not recorded in these accounts but is recorded in the financial account (see Quarterly Financial Accounts http://www.centralbank.ie/polstats/stats/qfaccounts/Pages/releases.aspx published by the Central Bank of Ireland and http://www.cso.ie/en/releasesandpublications/ep/p-isanff/isanff2014/ for annual integrated financial and non financial accounts).

Compensation of Employees

The Central Statistics Office (CSO) has re-examined the methodology used to calculate the compensation of employees (COE) results in the annual national accounts. Previously the main sources were the structural business censuses of industrial production and services. Now the administrative P35 data collected by the Revenue Commissioners (the State Tax collection authority) is used as the primary source of data. The years where the method has changed are 2011 – 2015. The P35 datasets give a more census-level coverage of the labour market in Ireland and contain information (at a person-job level) on pay for tax and for Social Insurance purposes and the amount of mandatory Employer’s Contribution to Social Insurance. They contain details of commencements/cessations of employment, employee personal public service (PPS) numbers, employer registration numbers (with links to employer information – e.g. NACE coding, institutional sector) and details of tax paid.  Other labour costs such as non-pension contributions of employers and benefits-in-kind are based on the results in the CSO’s Earnings, Hours and Employment Costs Survey (EHECS) at the detail level (A88).  In the case of pensions, data from the Irish Pensions Authority (IPA) is used directly in the estimate as it is deemed more accurate.

Consumption of Fixed Capital

The previous estimation of quarterly consumption of fixed capital (P.51C) has been revised. Work on improving this data has taken place since the transmission of the Q1 2016 data. Preliminary results of this exercise are now included with the latest transmission of data (i.e. Q2 2016 transmission). Quarterly data from 2010 onwards is benchmarked to the annual CFC (calculated using the perpetual inventory method) using the underlying quarterly investment data. Forecasts for the current year are generated by extending the series using the preliminary capital formation statistics. It must be understood that this exercise is still in the preliminary stages and may be subject to further refinement.

 

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