The household saving rate was 10.01% in the first quarter of 2023, largely unchanged from 10.08% in the last quarter of 2022 and down from 13.93% in Q1 2022.
The saving rate has been declining since the start of 2021 and is now around the same level as 2019.
Ireland's household saving rate has followed the trajectory of the EU as a whole.
Both consumption and income rose in the quarter in current prices, but after adjusting for inflation they were around the same as the previous quarter.
Estimates of total pay to workers rose due to both larger numbers in the workforce and higher average earnings.
The Gross Value Added of Non-Financial Corporations, which drives Ireland's Gross Domestic Product (GDP), was €5.4bn (5.7%) higher in Q1 2023 compared with the equivalent quarter of 2022.
There were no large imports of intellectual property in the quarter, and depreciation on the existing large stock of assets exceeded net investment in the quarter.
Continuing saving by households and government contributed to a current account surplus for Ireland in the period.
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Statistician's Comment
The Central Statistics Office (CSO) today (25 July 2023) released the Institutional Sector Accounts Non-Financial for Quarter 1, 2023.
Commenting on the release, Peter Culhane, Statistician in the National Accounts Analysis and Globalisation Division of the CSO said:
"The household saving rate was 10.01% in Quarter 1 (Q1) 2023, not significantly different to the 10.08% in the last quarter of 2022. The saving rate had been declining since the start of 2021 and it has returned to its 2019 level.
In the first quarter of the year, household saving was €4.8bn and this was used for capital investment (such as new homes), adding to deposits, building up pensions and paying off debts.
Ireland's saving rate followed a similar pattern to that of the rest of the EU during the pandemic. It was generally higher than our peers' during COVID-19 restrictions having been lower in 2019 and earlier years. It is now returning to a rate below the EU aggregate.
Incomes continued to grow in Q1 with high numbers in work and low unemployment. The increase kept pace with inflation but there was no significant growth in disposable income after adjustment for price changes.
Higher prices led to more household spending, but there was also greater volume of consumption of goods and services in the quarter. Household Consumption in January, February, and March (Q1) 2023 exceeded the peak pre-pandemic level of personal spending recorded in Q2 2019 by 27%, and by 8% after adjusting for inflation.
Constant price seasonally adjusted Gross Domestic Product (GDP) declined 2.8% compared with the last quarter of 2022, but GDP was higher than the first quarter of 2022.
The large imports of Intellectual Property seen in recent years have now tapered off and the decline in value of assets on Ireland's balance sheet now exceeds new capital investment.
Continuing saving by households and government contributed to a current account surplus for Ireland in the quarter."