The government surplus (net lending, B.9) was €520m in the first quarter of 2024. This was down from a surplus of €665m in the equivalent quarter of 2023.
The smaller surplus was due largely to higher social benefits (D.62) and final consumption expenditure (P.3) which combined grew by €1.6bn to €22.9bn.
On the income side, VAT-type taxes on products and production (D2) were up €969m while income and wealth taxes (D.5, which include PAYE and corporation tax) were down by €165m.
| Government balance (B.9)/quarterly GDP | |
| 2019Q1 | -2.27 |
| 2019Q2 | 0.99 |
| 2019Q3 | -1.15 |
| 2019Q4 | 3.90 |
| 2020Q1 | -3.80 |
| 2020Q2 | -7.40 |
| 2020Q3 | -6.61 |
| 2020Q4 | -1.98 |
| 2021Q1 | -5.85 |
| 2021Q2 | -2.31 |
| 2021Q3 | -2.17 |
| 2021Q4 | 3.98 |
| 2022Q1 | -0.29 |
| 2022Q2 | 1.24 |
| 2022Q3 | 1.39 |
| 2022Q4 | 3.84 |
| 2023Q1 | 0.52 |
| 2023Q2 | 1.18 |
| 2023Q3 | -0.10 |
| 2023Q4 | 4.48 |
| 2024Q1 | 0.41 |
The Gross Value Added by Non-Financial Corporations declined by €3.0bn in the first quarter of 2024 compared to the same period in 2023. This drove to the decline in GDP for the country as a whole.
The change in GVA by activity is illustrated in Figure 2.2. There was a decrease of GVA in Industry of €6.43bn. As shown in the following chapter, much of this decline related to manufacturing carried out abroad on behalf of corporations resident in Ireland (contract manufacturing, producing exports of goods for processing). The other large sector dominated by foreign-controlled corporations, Information & Communication grew by €1.61bn. The domestically focused sector Distribution, Transport, Hotels & Restaurants saw growth of €1.15bn in value added over the fourth quarter of 2022. Construction saw a decline of €0.1bn.
While overall GVA declined by €3.0bn, its labour element (Compensation of Employees, D.1) increased by €2.0bn, while its capital element (Gross Operating Surplus, B.2A3G) decreased by €5.3bn (taxes and subsidies account for the remainder of the change). The sector received higher income inflows from abroad on its investments (up €5.3bn to €17.5bn). On the back of lower profits, the investment income outflows were also lower (down €5.3bn to €49.3bn) and the Gross Saving (B.8g) at €30.0bn was €6bn higher than the third quarter of last year. Capital investment was €19.6bn (similar to its level in the first quarter of 2023), while investment in non-produced assets (such as trademarks) was €13bn (up €12.5bn) leaving net borrowing (B.9) at €2.5bn (a change of €5.9bn compared to net lending of €3.6bn in the first quarter of 2023).
| Change since 2023Q1 | |
| Industry (excl. Construction) | -6.43 |
| Construction | -0.10 |
| Distribution, Transport, Hotels & Restaurants | 1.15 |
| Information & Communication | 1.61 |
| Professional, Admin & Support Services | 0.87 |
| Arts, Entertainment & Other Services | 0.11 |
The flows of investment income of Financial Corporations, both in and out, grew by more than 100% in the two years since Q1 2022, with investment income outflows reaching €53.8bn. These increases reflect higher interest rates by central banks, as well as greater activity in the sector. The timing of investment income payments left the sector a net borrower (B.9) of €0.4bn in the quarter.
Most of the flows relate to assets held overseas, and while the gross flows amount to €105bn, the net investment income is €2bn. As we can see from the International Accounts Table 1.5, the investment income (primary income) is mostly paid and received by Other Financial Intermediaries, such as non-pension investment funds. Thus, while the value of transactions are very high in the sub-sector, they have limited impact on the domestic economy. However, these corporations did pay €2.9bn in Compensation of Employees in the quarter, up €230m on the same quarter last year.
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