Institutional Sector Accounts Non-Financial and Financial 2021

Private Sector Debt

The total debt¹ of the Private Sector² increased by 2.6% during 2021 to stand at €716.4bn by year-end. The threshold of 133% of GDP, set as part of the Macroeconomic Imbalance Procedure (MIP), was exceeded again in 2021. Figure 3.1 shows the development of private sector debt since 2011. The contribution from households to total private sector debt – composed mainly of mortgage-related debt – has maintained a steady decline from its peak in 2008 of €202.7bn, falling by €76.1bn in the intervening period.

 The debt of non-financial corporations (NFCs) increased in 2021 by €19.6bn, or 3.4%. However, the change between 2015 and 2021 continues to be negative, accumulating a decrease of 9.3%. Non-financial corporate debt grew by 70.6% in 2015 which drove the overall increase in private sector debt. This was driven by corporate restructuring both through imports of individual assets and also reclassifications of entire balance sheets in 2015 which meant that the level of capital assets in Ireland increased dramatically compared to 2014 (see National Balance Sheet for Ireland 2015 for further information).

 

Private Sector Credit Flow /GDP Ratio 2011-2021

The flow of private sector credit (defined as the sum of consolidated transactions in Table 2.6 - AF.3 Debt Securities and AF.4 Loans) was 2.6% of GDP during 2021. As shown in Figure 3.2, this was well within the threshold of +14% set under the Macroeconomic Imbalance Procedure. A positive credit flow equates to a net incurrence of debt during the year whereas a negative sign indicates a net running-down of debt during the same accounting period. The negative credit flows occurring in the Household sector since 2009, cumulatively amounting to €48.9bn, correspond to a net repayment, primarily, of mortgage related debt.

Financial balance sheet of the Non-Financial Corporation Sector split by ownership

A breakdown of the Non-Financial Corporations sector (S.11) financial balance sheet by ownership, along with corporate inversions/redomiciled PLCs, is presented in Table 2.9.

The total liabilities of foreign-owned NFCs, relative to the size of the sector, can be seen in Figure 3.3 (2012 – 2021). In 2021, foreign-owned NFCs make up 49.4% of the NFC sector. Note that the percentage of redomiciled PLCs is 16.1% in 2012 and increases to 28.4% by 2015, this is related to the increase of capital assets in Ireland in 2015, as discussed above.

Net Financial Worth of Non-Financial Corporations 2012-2021 split by ownership

Figure 3.4 shows the Net Financial Worth (BF.90) for S.11 proportioned by ownership (2012 – 2021). The trend shows that before 2015 much of the Net Financial Worth can be attributed almost evenly between foreign and Irish-owned entities, while the substantial change that occurs during 2015 is largely attributed to the foreign-owned NFC group (increasing from 55.4% in 2014 to 69.3% in 2015 of the total Net Financial Worth). In 2021 this proportion stands at 71.3%.