Macroeconomic Scoreboard 2016

Source Publication: National Income and Expenditure Annual Results

Get the data: Eurostat database, StatBank N1604 

Ireland’s GDP growth rates are shown in Figure 3.1. The change in trend during 2008-2009 of a declining GDP growth rate reflects the economic downturn during this period. Ireland experienced increasing GDP growth rates from 2013 to 2015. The substantial jump in GDP in 2015 is mostly due to the relocation of large multinational companies to Ireland in particular where their net exports are now from their Irish owned enterprises. In 2016, the GDP growth of 5.1% largely reflects the continued multinational activity in the country.

Supplementary analysis:

Get the data: Eurostat database

Figure 3.2 compares GDP growth rates across countries. Ireland’s 2016 GDP growth rate was the second highest in the EU. Further information from Ireland’s Economic Statistics Review Group can be found here.

^{*Due to individual chain linkages these values do not add up exactly to total GDP growth rates. Values for components are at factor cost. Adding taxes less subsidies provides market costs.}

Source Publication: National Income and Expenditure Annual Results

Get the data: StatBank N1604

Many sectors, such as industry, have tended to expand and contract in line with positive and negative overall growth. However, some have not. Construction continually fell in size from 2008 to 2012, with very little increase from 2013 to 2015. Construction exhibited a larger increase in 2016 as the demand for property in Ireland increases.

Indicator A2: Net Lending/Borrowing (% of GDP)

^{*Note there are some small differences between the CSO/Eurostat Current Account Balance values for 2008-2011 and 2016related to data vintages.}

Source Publication: Balance of International Payments

Get the data: Eurostat database, StatBank ISA04 (Current and Capital Account), StatBank N1605 (GDP)

Net lending/borrowing of a country corresponds to the sum of total current and capital accounts’ balances in the balance of payments. It represents the net resources that the total economy makes available to the rest of the world (if it is positive, i.e. net lending) or receives from the rest of the world (if it is negative, i.e. net borrowing).

Figure 3.4 shows the current and capital account balance as a percentage of GDP for Ireland, the United Kingdom, Germany and the Netherlands. Ireland experienced net borrowing from 2007 to 2012, with the highest amounts in 2007 and 2008, during the financial crisis. In 2015, there was a large increase in the current account balance related to corporate restructuring, both for imports of individual assets and also reclassifications of entire balance sheets, resulting in a high level of net lending. In 2016, the net lending figure stood at 2.3%, again mainly driven by corporate restructuring, but at a lower level than in 2015.

Supplementary analysis:

Source Publication: Institutional Sector Accounts Non-Financial and Financial 2016

Get the data: StatBank ISA04

Figure 3.5 shows the net lending/borrowing indicator for each sector expressed in billions of Euro. Notably in 2010, the Government sector was a large net borrower while the financial sector was a large net lender. This was driven by state interventions in the banking sector following the financial crisis. Government net borrowing has fallen steadily from its 2010 peak of €53.7bn and has declined by €51.8bn during the ensuing period, resulting in government net borrowing of €1.9bn in 2016.

Indicator A3: Residential Construction (% of GDP)

Get the data: Eurostat database

This measure refers to the percentage of GDP spent on construction of housing.¹ Residential construction in Ireland fell even more sharply than Spain and Greece until its recovery in 2013. However, it has still remained very low relative to its peak and to some of its major trading partners.

Supplementary analysis:

Get the data: StatBank N1616 (Gross Fixed Capital Formation), StatBank N1624 (GNI*)

Residential construction as a percentage of GNI* (modified GNI excluding globalisation effects) was 2.6% in 2016 up as compared 2.1% as a percentage of GDP. If GNI* for Ireland is comparable to GDP for other countries which are less significantly affected by globalisation, Ireland’s residential construction still remains low relative to most of its trading partners. For further information on GNI* and its calculation see the National Income and Expenditure Annual Results 2016.

Get the data: Eurostat database

Ireland had the third lowest share of residential construction in Europe as a percentage of GDP and ninth lowest as a percentage of GNI* in 2016.

Indicator A4: People at Risk of Poverty or Social Exclusion (% of Population)

Source Publication: Survey on Income and Living Conditions

Get the data: StatBank SIA12, Eurostat database

Ireland has consistently had a higher risk of poverty or social exclusion when compared to two of its major trading partners, the Netherlands and the UK. This rate increased from 2007 to 2012, but a reversal of this trend has been seen since 2012. It is important to note that this is a relative measure. 

Note: The figures above are consistent with those used by Eurostat. They are not directly comparable to our national figures in StatBank because of the use of different deprivation variables, minor differences in household income definitions, and differences in equivalence scales used to calculate equivalised household size.

Indicator A5: At Risk of Poverty Rate after Social Transfer (% of Population)

Source Publication: Survey on Income and Living Conditions

Get the data: StatBank SIA24, Eurostat database

Similar to the previous measure, Ireland has had a relatively high at risk of poverty rate after social transfer when compared to the Netherlands. In contrast, the consideration of social transfers shifts Ireland's at risk of poverty rate to generally lie below that of the UK, where it was consistently higher than the UK in the previous measure.²

Note: Again, the figures above are consistent with those used by Eurostat. They are not directly comparable to our national figures in StatBank because of the use of different deprivation variables, minor differences in household income definitions, and differences in equivalence scales used to calculate equivalised household size.

Supplementary analysis:

Get the data: Eurostat database

Ireland had the 17th lowest poverty rate after social transfer in the EU in 2016.

Indicator A6: Severely Materially Deprived People (% of Population)

Get the data: Eurostat database

Compared to its major trading partners, Ireland has a large number of severely materially deprived people. Severe material deprivation is an absolute measure of poverty, where people have living conditions severely constrained by a lack of resources.

Supplementary analysis:

Get the data: Eurostat database

Ireland was the 16th least materially deprived country in the EU in 2016. 

Indicator A7: People Living in Households with Very Low Work Intensity (% of total population under 60)

Get the data: Eurostat database

This indicator measures people living in households with very low work intensity. These are people aged 0-59 living in households where the adults (aged 18-59) worked less than 20% of their total work potential during the past year (students are excluded).

Ireland has tended to have a significantly higher rate of people living in households with very low work intensity when compared with some of its major trading partners. This gap was widest in the period 2009 to 2014, and while it has narrowed somewhat since, Ireland still has the highest rate of people living in households with very low work intensity in the EU.

Get the data: Eurostat database

Ireland had the highest rate of people living in very low work intensity households in 2016 when compared to other EU countries.

Indicator A8: Labour Productivity

Get the data: Eurostat database

This indicator shows the year-on-year percentage change in real labour productivity per person employed. Small fluctuations in labour productivity were seen for most years up to 2014, with the exception of 2010 which saw a 6.1% increase. 2014 saw a similar 6.5% increase, however the most notable change was seen in 2015. The marked level increase in productivity in 2015 of 22.5% can be attributed to the high growth recorded in this year. More information on this high GDP growth observed can be found here. In 2016 the percentage change in labour productivity decreased to 2.3%.

Get the data: Eurostat database

Ireland has the fifth highest rate of labour productivity in 2016.

Indicator A9: Foreign Direct Investment Flows (% of GDP)

Get the data: Eurostat database

Foreign Direct Investment is a category of cross-border investment made by a resident entity in one economy (the direct investor) with the objective of establishing a lasting interest in an enterprise resident in an economy other than that of the direct investor (the direct investment enterprise). The lasting interest of a direct investor is quantitatively defined as the ownership of 10%, or more, of the voting rights in the direct investment enterprise.

Inward Foreign Direct Investment (FDI), as a proportion of the reporting country’s Gross Domestic Product (GDP), can be interpreted as an indication of the extent of globalisation of an economy. A brief examination of Figure 3.18 reveals that there were relatively large flows of FDI into Ireland in 2016, making Ireland a highly globalised economy.

Supplementary analysis:

Get the data: OECD

FDI figures can be calculated in two distinct ways. These two methods are on a ‘directional’ basis and an ‘asset/liability’ basis. The above FDI figures, in Figure 3.19, are calculated on a directional basis. The same indicator is presented for MIP purposes in Figure 3.18 on an asset/liability basis.

Inward FDI Flows can differ quite substantially between the directional method and the asset/liability method. This can be seen when comparing the figures found above. Ireland’s Inward FDI Flows rise substantially when the asset/liability method is used, both in absolute terms and in relation to other European countries. International Statistical Manuals recommend interpreting FDI data on a directional basis where items such as intergroup reserve debt are shown on a net basis. For more on this, see the CSO's note on Two Methods of Measuring Foreign Direct Investment.

Indicator A10: Foreign Direct Investment Stocks (% of GDP)

^{Please note that Luxembourg, Cyprus, and Malta were removed for Figure 3.20 as their values were many multiples of the other countries values, making it difficult to illustrate a comparison graphically. Their values can be seen in the Eurostat database (link below).} 

Get the data: Eurostat database

Inward FDI Stocks as a percentage of GDP measures total investment in Ireland by foreign multinationals. Figure 3.20 shows that in 2016 Ireland had substantial stocks of FDI when compared with other developed economies.

Supplementary analysis:

Get the data: Eurostat database

Figure 3.21 shows Inward FDI Stocks as a percentage of Ireland’s GDP for the years 2007 to 2016. As with Inward FDI Flows, Stocks can also be calculated on either a directional or an asset/liability basis.

Get the data: OECD

Figure 3.22 shows that Irish Inward FDI Stocks were higher when calculated using the asset/liability method rather than the directional method.

Get the data: OECD

Figure 3.23 shows that the growth of Inward FDI Stocks as a percentage of Irish GDP over previous years is found whichever method is used to calculate the figures. While Irish Inward FDI Stocks grew in absolute terms in 2016 under the directional presentation, the higher growth rate of Gross Domestic Product meant that they actually fell as a percentage of Irish GDP.

Indicator A11: Financial Sector Leverage (non-consolidated)

Source publication: Institutional Sector Accounts Non-Financial and Financial 2016

Get the data: StatBank IFI03

The Financial Sector Leverage (debt-to-equity ratio) indicator shows the relative proportion of debt used to finance assets to shareholders' equity (Figure 3.24). It is defined for balance sheet liabilities as the ratio of the sum of Currency and deposits, Debt securities, Loans and Financial derivatives and employee stock options to Equity and investment fund shares. It is closely related to Headline Indicator 11 – Change in Total Financial Sector Liabilities.

Since 2009 there has been a reduction in the Financial Sector debt-to-equity ratio mainly driven by the growth of the Investment Funds sector and the deleveraging of the banking sector. Since 2013 the structure of the balance sheet of the Financial Sector has evolved such that the leverage ratio has fallen below 100% resulting from more equity than debt in the sector.