The government surplus (net lending, B.9) was €3.7bn in the second quarter of 2024. This was up from a surplus of €1.5bn in the equivalent quarter of 2023.
The higher surplus was due largely to greater tax income, specifically income and wealth taxes (D.5), which were up €3.0bn (19%) from €15.4bn in Q2 2023 to €18.4bn in Q2 2024.
On the expenditure side, final consumption expenditure (P.3) rose by 6% to €16.3bn year on year, while social protection (D.62) rose by just 2% to €7.7bn.
| Government balance (B.9)/quarterly GDP | |
| 2023Q1 | 0.49 |
| 2023Q2 | 1.17 |
| 2023Q3 | -0.11 |
| 2023Q4 | 4.48 |
| 2024Q1 | 0.46 |
| 2024Q2 | 2.97 |
The Gross Value Added by Non-Financial Corporations declined by €5.4bn in the second 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 €6.6bn. The other large sector dominated by foreign-controlled corporations, Information & Communication grew by €0.5bn. The domestically focused sector Distribution, Transport, Hotels & Restaurants saw growth of €0.2bn in value added over the second quarter of 2023.
While overall GVA declined by €5.4bn, its labour element (Compensation of Employees, D.1) increased by €1.3bn, while its capital element (Gross Operating Surplus, B.2A3G) decreased by €6.7bn (taxes and subsidies account for the remainder of the change). The sector received higher income inflows from abroad on its investments (up €2.2bn to €17.7bn). On the back of lower profits, the investment income outflows were also lower (down €3.3bn to €44.9bn) and the Gross Saving (B.8g) at €27.8bn was €3.2bn lower than the second quarter of last year.
The biggest change in the quarter was in the capital investment of the sector. There were large sales of intellectual property (unlike several recent quarters which have seen large purchases of IP). These sales are counted as negative capital investment, and deducted from purchases to get the net capital formation (P.5). This net figure was €2.3bn in the second quarter of 2024, compared to 23.9bn in the second quarter of last year, which was a more normal level. This low level of net investment left net lending (B.9) at €21.0bn, up from 1.6bn this time last year.
| Change since 2023Q2 | |
| Industry (excl. Construction) | -6.63 |
| Construction | 0.03 |
| Distribution, Transport, Hotels & Restaurants | 0.21 |
| Information & Communication | 0.48 |
| Professional, Admin & Support Services | 0.61 |
| Arts, Entertainment & Other Services | -0.09 |
Investment income (D.4) received by financial corporations in the second quarter reached €61bn, compared to €50bn in Q2 2023 and €29bn in Q2 2022. These increases reflect higher interest rates by central banks, as well as greater activity in the sector. Outflows to investors abroad also grew at the same pace. The timing of investment income payments left the sector a net borrower (B.9) of €2.5bn in the quarter.
Most of the flows relate to assets held overseas. 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 €2.8bn in Compensation of Employees in the quarter, up €0.1bn on the same quarter last year, and corporation tax of €1.5bn, up €0.4bn on last year.
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