International Accounts Q4 2024

Direct investment income outflows (earned on investments in Ireland by investors located abroad) were €63.6bn in the fourth quarter of 2024, an increase of €14.6bn compared with the third quarter of 2024. Direct investment income inflows, which represent income earned abroad by investors located in Ireland, were €24.5bn in the fourth quarter of 2024, an increase of €5.6bn from the previous quarter.

The composition of direct investment income outflows is presented in Figure 4.2. Income outflows on reinvested earnings were €34.7bn in the fourth quarter of 2024, an increase of €30.5bn compared with the third quarter of 2024. Dividends & distributed branch profits outflows at €26.5bn were down €15.6bn on the previous quarter while income on debt outflows at €2.3bn was down €253m.

Figure 4.3 illustrates a breakdown of direct investment income outflows between two sectors, manufacturing and information and communications. Of the €63.6bn in direct investment income outflows in the fourth quarter of 2024, €37.6bn can be attributed to the manufacturing sector and €15.7bn to the information and communications sector. Manufacturing sector income outflows increased by €5.7bn while information and communications sector income outflows increased by €4.5bn when compared to the previous quarter.

Foreign direct investment (FDI) transactions abroad and in Ireland are shown in Figure 4.4. Direct investment into Ireland decreased by €24.3bn in the fourth quarter of 2024. Direct investment abroad decreased by €11.6bn in the quarter.

The stock of FDI assets held abroad increased from €1,179bn in Q3 2024 to €1,326bn in Q4 2024, while the stock of FDI assets held in Ireland increased from €1,061bn in Q3 2024 to €1,127bn in Q4 2024. FDI assets held abroad by Irish investors increased by €148bn, and FDI assets held in Ireland by foreign investors increased by €66bn.

The impact of foreign direct investment income on the current account balance is shown in Figure 4.6. In Q4 2024 net direct investment income (FDI income inflows less FDI income outflows) was -€39.1bn while the net of all other current account components (trade in merchandise, services and other income) stood at €57.3bn. The resultant balance was a current account surplus of €18.2bn.

The impact of direct investment transactions on the financial account balance is shown in Figure 4.7. In Q4 2024 there were net flows of €12.7bn in foreign direct investment transactions while the net contribution from other financial account components (portfolio investment, other investment and reserve assets) was €2.6bn. This contributed to a financial account surplus of €15.4bn.

The net stock of foreign direct investment assets in the net international investment position (IIP) is shown in Figure 4.8. In Q4 2024 there was a net direct investment position of €200bn. Other net IIP components (portfolio investment, other investment and reserve assets) accounted for -€630bn. The overall net IIP balance was -€430bn.

The rate of return on FDI investment in Ireland and abroad alongside the stock of FDI assets held in Ireland and abroad is presented in Figure 4.9. The rate of return is calculated as FDI income divided by FDI positions. The return on investments in Ireland is significantly higher than the return on investments made abroad. In Q4 2024 the annual rate of return on FDI investment in Ireland was 18.1% compared to 6% on FDI investment abroad.