Macroeconomic Scoreboard 2019

Source Publication: National Income and Expenditure 2019

Get the data: Eurostat database, StatBank N1904

Ireland’s Real GDP growth rates are shown in Figure 3.1. Ireland experienced increasing GDP growth rates from 2013 to 2015. The substantial jump in GDP in 2015 was 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 2019, the GDP growth of 5.6% reflects both the continued multinational activity in the country and increased domestic activity. As a result of its highly globalised economy, Ireland has experienced higher GDP growth than many of its European trading partners in recent years.

Supplementary analysis:

Get the data: Eurostat database

Figure 3.2 compares real GDP growth rates across countries. Ireland’s real GDP growth rate was the highest in the EU in 2019. 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 2019

Get the data: StatBank N1904

Industry was the main driver of GDP growth between 2010 and 2019. Information and communication, and other services including public services have had the next largest impact on GDP over the period. The construction sector has had a small impact on GDP growth in recent years. 

Indicator A2: Net Lending/Borrowing

Source Publication: International Accounts Q2 2020

Get the data: Eurostat database, StatBank ISA04 (Net Lending/Borrowing), StatBank N1905 (GDP)

Net lending/borrowing of a country corresponds to the sum of the balances of its current and capital accounts, 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 net lending/borrowing as a percentage of GDP for Ireland, the United Kingdom, Germany and the Netherlands. Ireland has had far greater fluctuations in levels of net lending/borrowing than the other countries shown. This is a result of the highly globalised nature of Ireland's economy. Ireland experienced net borrowing from 2010 to 2012. 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 higher level of net lending than was previously seen. Since 2016, Ireland has experienced increasing levels of net borrowing. In 2019, Ireland had net borrowing of 21.2% of GDP, over double the level of 9.9% in 2018. Ireland's net borrowing figure was €75.5bn in 2019, an increase of over €40bn compared to 2018. This was mainly due to increased levels of intellectual property (IP) imports, which measured €84.1bn in 2019, causing a high current account balance of €40.4bn in that year. 

Supplementary analysis:

Source Publication: Institutional Sector Accounts Non-Financial and Financial 2019

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. Net borrowing of the government sector has fallen steadily from its 2010 high of €53.8bn, and in 2018 it became a net lender for the first time since the financial crisis. The government sector continued to lend more than it borrowed in 2019, with net lending at €1.4bn. NFCs have been the main driver of the net borrowing experienced in 2016-2019, with their borrowing mainly financing large IP imports and other capital expenditure over the period.

Indicator A3: Residential Construction

Get the data: Eurostat database, Statbank N1924 (GDP), Statbank N1916 (Gross Fixed Capital Formation)

This measure refers to the percentage of GDP spent on construction of housing.¹ Residential construction in Ireland has consistently been low relative to some of its major EU trading partners. Residential construction has grown consistently since its low of 1.5% of GDP in 2015, remaining at 2.3% of GDP for the second consecutive year in 2019.  

Supplementary analysis:

Get the data: StatBank N1916 (Gross Fixed Capital Formation), StatBank N1924 (GNI*)

Residential construction as a percentage of GNI* (modified GNI excluding globalisation effects) was 3.8% in 2019. This was significantly higher than residential construction as a percentage of GDP, which was 2.3%. If GNI* for Ireland is comparable to GDP for other countries which are less significantly affected by globalisation, Ireland’s residential construction remains low relative to many of its main trading partners. For further information on GNI* and its calculation see the National Income and Expenditure 2019. 

Get the data: Eurostat database, Statbank N1916 (Gross Fixed Capital Formation), Statbank N1924 (GDP)

Ireland had the fourth lowest share of residential construction as a percentage of GDP in Europe in 2019. If GNI* for Ireland is comparable to GDP for other countries which are less significantly affected by globalisation, Ireland had the 12th lowest share of residential construction in 2019.

Indicator A4: People at Risk of Poverty or Social Exclusion

Source Publication: Survey on Income and Living Conditions

Get the data: StatBank SIA12, Eurostat database

This indicator corresponds to the sum of persons who are at risk of poverty, severely materially deprived or living in households with very low work intensity. Ireland’s at risk of poverty or social exclusion rate has been falling steadily for six years, dropping to 21.1% in 2018, compared to its high of 30.1% in 2012. Figure 3.9 shows that in 2010 Ireland’s at risk of poverty or social exclusion rate was high relative to Germany, the Netherlands and the UK and very similar to that of Greece and Spain. This contrasts with the levels observed in 2018, when Ireland’s rate was higher than that of Germany and the Netherlands but significantly lower than that of the UK, Spain and Greece.

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

Source Publication: Survey on Income and Living Conditions

Get the data: StatBank SIA24, Eurostat database

This indicator measures the percentage of the population with an equalised disposable income below 60% of the national median after taking social transfers into consideration. Figure 3.10 compares Ireland's at risk of poverty rate after receiving social transfers to that of some of the country's major trading partners. In 2018, 14.9% of people in Ireland were at risk of poverty after receiving social transfers, down from 15.6% in 2017. Ireland’s rate was lower than that of Spain, Greece, the UK, and Germany, but higher than that of the Netherlands in 2018.

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.

Supplementary analysis:

Get the data: Eurostat database

Ireland had the 11th lowest at risk of poverty rate after social transfer rate in the EU in 2018. 

Indicator A6: Severely Materially Deprived People

Get the data: Eurostat database

Severely materially deprived people have living conditions that are severely constrained by a lack of resources. Compared to some of its major trading partners, Ireland has a higher proportion of severely materially deprived people. Ireland's deprivation rate was highest in 2012 and 2013 at 9.9% but has improved significantly in recent years. In 2018, 4.9% of people in Ireland were severely materially deprived, down from 5.2% in 2017.

Supplementary analysis:

Get the data: Eurostat database

Figure 3.13 shows that Ireland's deprivation rate in 2018 sits mid table amongst its european counterparts, 15th lowest.

Indicator A7: People Living in Households with Very Low Work Intensity

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 generally had a 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 2010 to 2013 and while it has narrowed somewhat since, Ireland’s rate remains higher than that of Germany, the Netherlands, Spain and the UK. In 2018, 13% of people in Ireland were living in a household with very low work intensity, down from 16.2% in 2017.

Get the data: Eurostat database

Figure 3.15 shows that Ireland had the second highest rate of people living in very low work intensity households in 2018 when compared to other EU countries.

Indicator A8: Labour Productivity

Get the data: Eurostat database

Real labour productivity is measured as GDP per person employed, including self-employed. This indicator shows the year-on-year percentage change in real labour productivity. A positive annual change in labour productivity was seen for every year except 2013 and 2016. The most notable change was seen in 2015, with a marked level increase in productivity of 20.8%. This can be attributed to the high GDP growth recorded in this year. More information on the high GDP growth observed in 2015 can be found here. In 2019 the percentage change in labour productivity was 2.6%. Ireland experienced higher levels of growth in labour productivity than many of its European trading partners between 2010 and 2019.

Further information on labour productivity can be found in our Productivity in Ireland publication.

Get the data: Eurostat database (GDP), Eurostat database (Employment), Eurostat database (Labour Productivity)

Figure 3.17 shows the breakdown of real labour productivity growth into its two components - change in people employed and change in constant prices GDP. The significant effect of changes in GDP on labour productivity growth can be clearly seen. This is demonstrated in 2015, when the change in people employed was 3.6% but the 25.2% increase in real GDP resulted in a 20.8% increase in labour productivity. Further information on labour productivity can be found in the CSO publication Productivity in Ireland 2018.

Get the data: Eurostat database

At 2.6%, Ireland had the seventh highest rate of growth in labour productivity in the EU in 2019.

Indicator A9: Foreign Direct Investment Flows

Get the data: Eurostat database (Asset/Liability Presentation), OECD database (Directional Presentation)

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.

Figure 3.19 shows that flows of direct investment into Ireland decreased from 17.6% of GDP in 2018 to -11.4% of GDP in 2019 on an asset/liability basis. However, FDI figures can be calculated in two distinct ways. These two methods are on the aforementioned asset/liability basis and the directional basis. Using the directional basis, investments are separated by direction (inward or outward) and reverse flows are netted which reduces the amount of pass through funds present. Taking these reverse flows into account, there was an increase of direct investment into Ireland in 2019 of approximately 20.3% of GDP. For further work by the CSO on the netting of reverse investment/pass-through funds from FDI statistics see the Special Purpose Entities and Pass-Through chapter of our annual FDI publication.

For more information on FDI see Foreign Direct Investment 2018.

Supplementary analysis:

Get the data: Eurostat database (Asset/Liability Presentation), StatBank BPA16, OECD database (Directional Presentation)

The above FDI figures, in Figure 3.20, show the value of FDI flows in 2019 for selected EU countries using both methods.

As seen graphically, the asset/liability and directional methods can give two disparate results. In 2019, FDI flows into Ireland were -11.4% of GDP using the asset/liability method, in contrast to 20.3% of GDP when using the directional method which accounts for reverse investment flows. In 2019, FDI flows into Luxembourg as a percentage of GDP stood at -446.6% when using the asset/liability method. The corresponding figure when using the directional method was -16.1%. Luxembourg could not be shown in the above graph due the magnitude of its asset/liability presentation value, which was by far the greatest among EU member states. 

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 the difference between the two methods, see the CSO's note on Two Methods of Measuring Foreign Direct Investment.

Indicator A10: Foreign Direct Investment Stocks

Get the data: Eurostat database (Asset/Liability Presentation), OECD database (Directional Presentation), StatBank BPQ26

Figure 3.21 shows Inward FDI stocks as a percentage of GDP. This statistic measures total investment in Ireland by foreign investors using the two methods explained previously. In 2019, FDI stocks in Ireland were 288.1% of GDP using the directional method, an increase of 8pp over 2018 values. Using the asset/liability method, FDI stocks fell by 37pp to 436.7% in 2019. The decrease in stocks in Ireland using the assets/liability method versus the increase under the directional method is indicative of a fall in liabilities that are classified as reverse investment flows i.e. a reduction of funds passing through the country. 

Supplementary analysis:

Get the data: Eurostat database (Asset/Liability Presentation), OECD database (Directional Presentation)

As seen in Figure 3.22, the figures for Ireland and the Netherlands exceed those of other European countries; this highlights the role of both countries as European financial centres. Luxembourg reported inward FDI stocks of 6,742% of GDP in 2019 using the directional method, by far the highest value reported by any EU country.  Using the asset/liability method, FDI stocks in Luxembourg stood at 225% of GDP. This constituted the second highest value in Europe using this method, with Ireland reporting the highest. Luxembourg could not be shown in the above graph due the magnitude of its directional presentation value. 

Indicator A11: Financial Sector Leverage

Source publication: Institutional Sector Accounts Non-Financial and Financial 2019

Get the data: StatBank IFI03

Figure 3.23 shows the debt-to-equity ratio, which is the relative proportion of debt to shareholders' equity used to finance assets. 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 2010, 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. In 2019 the financial sector debt-to-equity ratio was 54.9%, a reduction of 8.6% on its 2018 level of 63.5%.

Supplementary analysis:

Source publication: Institutional Sector Accounts Non-Financial and Financial 2019

Get the data: StatBank IFI03

Figure 3.24 shows the breakdown of financial sector leverage into its components - debt and equity. The value of debt dropped steadily from 2010 to 2013, but has been fluctuating since, and stands at €1.9 trillion in 2019. The value of equity has increased consistently since 2010 and stands at €3.5 trillion in 2019.

Indicator A12: Net IIP Excluding Non-Defaultable Instruments (NENDI)

Get the data: Eurostat database

Figure 3.25 shows the net international investment position excluding non-defaultable instruments (NENDI) indicator and the building blocks which can be used to calculate this. The NENDI indicator is a subset of the net international investment position (IIP) which excludes equity-related components, namely FDI equity and equity shares, and intracompany cross-border FDI debt. The indicator is based on annual figures from the CSO balance of payments data and is defined as the IIP minus net foreign direct investment minus net portfolio equity. The value of NENDI in 2019 was -285.4% of GDP.

A13: Household Debt

Source publication: 

Get the data: StatBank N1905 (GDP), StatBank IFI05 (Household Debt)

Household debt has decreased every year since 2010 and stood at 37.2% of GDP in 2019, a decrease of 4.1 percentage points from the 2018 value. Notably, the 2019 value for household debt as a percentage of GDP is just over one third of the level seen in 2010. This emphasises both the very substantial rise in GDP and the significant deleveraging experienced by households, as they experienced net saving over the period. Household debt fell from €184.9bn in 2010 to €132.4bn in 2019, while GDP more than doubled over the same period.