Press Statement

Preasráiteas

02 November 2021

Go to release: Institutional Sector Accounts Non-Financial and Financial 2020

The Central Statistics Office (CSO) has today (02 November 2021) released Institutional Sector Accounts Financial and Non-Financial 2020.

Commenting on the release, Peter Culhane, Statistician, said: “Households saved more than €31 billion in 2020, most of which is sitting on deposit with banks according to figures released by the CSO today. This is almost three times the level of saving before the pandemic and is the result of higher household incomes and lower consumer spending. Incomes for those who continued to work through the restrictions rose on average, while an €8.8 billion government intervention mitigated the decline in incomes for those out of work because of the pandemic.

This extra saving brought household financial net worth to an all-time high of €312.8bn in 2020. Wealth held in fixed assets such as houses is in addition to this. The addition of €16bn in deposits was the biggest area for asset growth: for comparison, in 2006, at the height of the SSIAs, less than €12bn was added to deposits. Saving also went into paying off debt (a decrease in loan liabilities), pensions and real assets like new homes.

The pandemic restrictions that produced higher savings for households also led to an 8% decline in profits for Irish owned companies, with those in travel and hospitality hardest hit. At the same time, the foreign multi-nationals here, which are mainly in technology and pharmaceuticals, saw profit growth of 12% in their Irish operations.

Meanwhile the additional financial supports to households and additional spending on services drove the government deficit (spending less receipts) to €18bn in 2020. This is far below the peak of €54bn during the financial crisis, but well above the Maastricht threshold of 3% of GDP. The gross government debt (balance sheet liabilities to lenders) rose to 58.4% of GDP, which is below the 60% EU imbalance threshold (because the multi-nationals inflate Ireland's GDP figure: government debt is 105% of modified GNI)

Private sector debt (debt of the Non-Financial Corporations, Households and Non-Profits) decreased during 2020 to stand at €704.5bn by year-end. This was due to declines in the debt of both non-financial corporations, and households and non-profits. At 189% of GDP, the private sector debt to GDP ratio continued to exceed the threshold of 133% of GDP set as part of the Macroeconomic Imbalance Procedure, mostly due to the activity of foreign-owned non-financial corporations.

Balance sheets of financial corporations continued to grow, rising above €6.5 trillion in 2020, of which €5.2 trillion were held in the rest of the world. This growth was driven by activity in the Non-Money Market Funds (which includes open-ended and closed-ended investment funds, real estate investment funds, and hedge funds).

Ireland's globalised economy complicates some of the common economic indicators, like GDP and private sector debt. The impact of the pandemic in 2020 also make the usual headline indicators less meaningful. These statistics in the sector accounts provide a richer picture which analysts can use to delve more deeply into the structure and trends in the economy.”

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