National Balance Sheet for Ireland 2015

This information note brings together the existing publications on Institutional Sector Accounts and Estimates of Capital Stock, by combining market values of the financial and produced non-financial assets of Ireland to provide a measure of the nation’s wealth. We also try to address the recommendation of the Economic Statistics Review Group (ESRG) to help explain the dynamics behind Intellectual Property (IP) and how it is financed. As a result, the impact of the large increase in IP assets in Ireland in recent years, and its corresponding financing by way of loans and equity, can be clearly seen on Ireland’s National Balance Sheet.

The Total Net Worth¹ of Ireland was estimated at €230 billion at the end of 2015. This was equivalent to approximately €50,000 per capita or €134,000 per household.

 

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The current estimate of Ireland’s total net worth is similar to that of 15 years earlier, with a net worth of €243 billion in 2001 compared to €230 billion in 2015, a drop of €13 billion. This was equivalent to a decrease of approximately €13,000 per capita, from approximately €63,000 per capita in 2001 to approximately €50,000 per capita in 2015. The components feeding into these two similar figures have changed significantly, however. Non-financial assets have risen from €263 billion in 2001 to €761 billion in 2015, while financial net worth has plummeted from -€20 billion in 2001 to -€531 billion in 2015.

The majority of the increase in non-financial assets has come from Machinery and Equipment², and Intellectual Property Products. These categories combined rose from to €47 billion in 2001 to €389 billion in 2015. The individual figures for these two asset classes cannot be split out in 2015 due to the confidential nature of this data. The majority of the decrease in financial net worth resulted from increases in Irish Government security liabilities during the financial crisis, and more recently from increased loan and equity liabilities to fund capital assets in 2015. The estimate of Ireland’s total net worth increased consistently from 2001 until the economic downturn in 2008 and 2009. From 2012 onwards, it has again increased each year with the exception of 2014. Ireland’s estimated value of €230 billion at the end of 2015 is an increase of 38% (€63 billion) over its position at the end of 2014.

The estimated value of non-financial assets increased by €281 billion (59%) between the end of 2014 and the end of 2015. This increase in non-financial assets was largely due to Machinery and Equipment, and Intellectual Property Products. These categories combined rose from €134 billion in 2014 to €389 billion in 2015, an increase of €255 billion (191%). Ireland’s estimated financial net worth at the end of 2015 was -€531 billion. This decreased by €219 billion (70%) between the end of 2014 and the end of 2015. The decrease in financial net worth was largely due to an increase in Equity and Investment Fund Shares/Units liabilities which were used to fund the IP Products included in the non-financial assets of Ireland.

All estimates are based on market value.

Analysis by Type of Asset

Non-Financial Assets

The following financial assets and liabilities are included:

- Monetary Gold and Special Drawing Rights
- Currency and Deposits
- Debt Securities
- Loans
- Equity and Investment Fund Shares and Units 
- Insurance, Pension and Standardised Guarantee Schemes
- Financial Derivatives and Employee Stock Options
- Other Accounts Receivable/Payable

Approximately three quarters of the value of Irish financial assets and liabilities is made up of a combination of just three of the eight financial asset types, namely Debt Securities, Loans, and Equities and Investment Fund Shares. For more detail on the exact breakdown and figures, please see the Institutional Sector Accounts Non-Financial and Financial 2015 publication, or Table 2.8 showing the breakdown of Net Worth over the 15 year period from 2001 to 2015.

International Comparison³

In 2015, Ireland’s net worth as a percentage of GDP (89.7%) is the lowest of the 14 European countries for which data is available. Luxembourg has the next lowest value (210.9%), over 120% above Ireland’s value. Where additional data was available in previous years for 24 European countries (see Table 1.5), Ireland still has a lower value than most other countries. For example, in 2014 only Poland’s figure (80%) fell below that of Ireland (86%), with the next closest value being Cyprus (163%), almost double Ireland’s figure. In contrast, countries such as Austria and Norway exhibited very high levels of Total Net Worth as a percentage of GDP, with values in the region of 400% and over. In 2014, the average net worth as a percentage of GDP was 294% for the 24 European countries for which data is available on Eurostat. In 2015, the average was 314% for the 14 countries for which data was available.

Ireland’s highly globalised economy has significant net factor flows, corporate inversions, IP and aircraft leasing activities. These have a cumulative effect of increasing Ireland’s GDP value significantly (for more information see National Income and Expenditure Annual Results (PDF 2,311KB) ). For this reason, Ireland’s Total Net Worth as a percentage of GDP is difficult to compare to that of many other EU countries.

In the Figure 1.8 we have stripped out the effect of Ireland’s increased GDP by instead examining net worth per capita. Ireland’s net worth per capita is approximately €50,000, which is again the lowest of the 14 European countries for which data is available in 2015. However, unlike in the previous graph, Ireland’s 2015 net worth per capita is at a comparable level to a number of other countries. Slovenia, Slovakia and Czech Republic all lie in the region of €55,000-€61,000 per capita.

In 2014, Ireland had the sixth lowest net worth per capita of approximately €36,000. Poland had the lowest figure, a value of approximately €9,000 per capita, roughly 25% of Ireland’s figure. This contrasts significantly with the figures in Table 1.5 where Ireland and Poland had similar values of net worth as a percentage of GDP (86% vs. 80% respectively).

In 2014, the average net worth per capita was approximately €93,000 for the 24 European countries for which data is available on Eurostat. In 2015, the average was approximately €112,000 for the 14 countries for which data was available. The UK had a value of approximately €91,000 in 2015.

Footnotes

¹ Data on the value of Non-Produced Non-Financial Assets, Inventories and Valuables were not available and are not included in any of the Total Net Worth figures calculated.

² Machinery and Equipment Category also includes Weapon Systems.

³ All data used in International Comparisons was extracted from Eurostat tables on 30 June 2017.

Go to Chapter 2: Dynamics of the National Balance Sheet >>