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Foreign Direct Investment

Foreign Direct Investment

Direct Investment Income Outflows increased by €21bn in Q1 2025

Online ISSN: 2565-6384
CSO statistical release, , 11am
InflowsOutflows
Q4 202210.37247.701
Q1 202313.62557.576
Q2 202317.23249.041
Q3 202316.43247.706
Q4 202320.28843.254
Q1 202414.11847.644
Q2 202420.51447.37
Q3 202416.61950.55
Q4 202423.00464.703
Q1 202520.85885.695

Direct investment income outflows (earned on investments in Ireland by investors located abroad) were €85.7bn in the first quarter of 2025, an increase of €21bn compared with the fourth quarter of 2024. Direct investment income inflows, which represent income earned abroad by investors located in Ireland, were €20.9bn in the first quarter of 2025, a decrease of €2.1bn from the previous quarter.

Income on Debt OutflowsReinvested Earning OutflowsDividends & Distributed Branch Profits Outflows
Q4 20223.72411.98831.988
Q1 20233.754-3.11156.934
Q2 20233.782-37.65882.918
Q3 20233.53813.19930.969
Q4 20233.9720.75218.532
Q1 20243.2140.4244.01
Q2 20242.8371.44743.086
Q3 20242.6035.76742.18
Q4 20242.35836.15526.191
Q1 20252.19255.78427.719

The composition of direct investment income outflows is presented in Figure 5.2. Income outflows on reinvested earnings were €55.8bn in the first quarter of 2025, an increase of €19.6bn compared with the fourth quarter of 2024. Dividends & distributed branch profits outflows at €27.7bn were up €1.5bn on the previous quarter while income on debt outflows at €2.2bn was down €166m.

Direct Investment Income Outflowsof which Manufacturingof which Information and Communications
Q4 202247.70130.12111.101
Q1 202357.57640.6738.932
Q2 202349.04128.312.659
Q3 202347.70627.86810.168
Q4 202343.25423.02211.632
Q1 202447.64428.94711.966
Q2 202447.3724.83914.604
Q3 202450.5532.26411.722
Q4 202464.70337.65416.378
Q1 202585.69561.55916.349

Figure 5.3 illustrates a breakdown of direct investment income outflows between two sectors, manufacturing and information and communications. Of the €85.7bn in direct investment income outflows in the first quarter of 2025, €61.6bn can be attributed to the manufacturing sector and €16.3bn to the information and communications sector. Manufacturing sector income outflows increased by €23.9bn while information and communications sector income outflows decreased by €29m when compared to the previous quarter.

AbroadIn Ireland
Q4 2022-19.228-31.184
Q1 2023-32.582-46.046
Q2 2023-97.089-105.814
Q3 20235.45827.148
Q4 202327.83614.668
Q1 202422.0111.662
Q2 202424.512-23.007
Q3 2024-5.18911.658
Q4 2024-13.51-24.619
Q1 202513.39117.184

Foreign direct investment (FDI) transactions abroad and in Ireland are shown in Figure 5.4. Direct investment into Ireland increased by €17.2bn in the first quarter of 2025. Direct investment abroad increased by €13.4bn in the quarter.

AbroadIn Ireland
Q4 20221210.9991350.229
Q1 20231196.6171252.344
Q2 20231147.1211157.249
Q3 20231130.0141198.814
Q4 20231155.8311186.566
Q1 20241127.4731047.784
Q2 20241082.5831049.102
Q3 20241048.6451006.56
Q4 20241191.5571089.15
Q1 20251168.6261080.265

The stock of FDI assets held abroad decreased from €1,192bn in Q4 2024 to €1,169bn in Q1 2025, while the stock of FDI assets held in Ireland decreased from €1,089bn in Q4 2024 to €1,080bn in Q1 2025. FDI assets held abroad by Irish investors decreased by €22.9bn, and FDI assets held in Ireland by foreign investors decreased by €8.9bn.

Net Direct Investment IncomeAll Other Current Account ComponentsCurrent Account Balance
Q4 2022-37.32945.2147.884
Q1 2023-43.95154.87510.924
Q2 2023-31.80942.86311.054
Q3 2023-31.27447.45916.184
Q4 2023-22.96621.721-1.246
Q1 2024-33.52651.43817.912
Q2 2024-26.85662.06735.211
Q3 2024-33.93153.62719.696
Q4 2024-41.69959.85218.152
Q1 2025-64.83770.6745.837

The impact of foreign direct investment income on the current account balance is shown in Figure 5.6. In Q1 2025 net direct investment income (FDI income inflows less FDI income outflows) was -€64.8bn while the net of all other current account components (trade in merchandise, services and other income) stood at €70.7bn. The resultant balance was a current account surplus of €5.8bn.

Net Direct Investment TransactionsAll Other Financial Account ComponentsFinancial Account Balance
Q4 202211.956-1.05610.9
Q1 202313.464-7.595.875
Q2 20238.725-3.1085.616
Q3 2023-21.6934.23612.544
Q4 202313.168-7.6135.555
Q1 202420.349-9.68510.661
Q2 202447.519-6.61140.907
Q3 2024-16.84733.47816.631
Q4 202411.10913.97825.087
Q1 2025-3.79317.14813.354

The impact of direct investment transactions on the financial account balance is shown in Figure 5.7. In Q1 2025 there were net flows of -€3.8bn in foreign direct investment transactions while the net contribution from other financial account components (portfolio investment, other investment and reserve assets) was €17.1bn. This contributed to a financial account surplus of €13.4bn.

Net Direct Investment PositionAll Other Net IIP ComponentsNet IIP
Q4 2022-139.23-407.913-574.765
Q1 2023-55.727-509.638-565.365
Q2 2023-10.128-562.94-573.068
Q3 2023-68.8-501.124-569.924
Q4 2023-30.735-511.374-542.109
Q1 202479.689-594.615-514.926
Q2 202433.481-517.543-484.062
Q3 202442.085-478.896-436.811
Q4 2024102.407-560.365-457.958
Q1 202588.361-484.644-396.283

The net stock of foreign direct investment assets in the net international investment position (IIP) is shown in Figure 5.8. In Q1 2025 there was a net direct investment position of €88.4bn. Other net IIP components (portfolio investment, other investment and reserve assets) accounted for -€485bn. The overall net IIP balance was -€396bn.

Direct Investment Position Abroad (left axis)Direct Investment Position In Ireland (left axis)Return on FDI Abroad (right axis)Return on FDI in Ireland (right axis)
Q4 20221210.9991350.2293.1953783611712314.1723366925166
Q1 20231196.6171252.3443.513739149619316.0626792638444
Q2 20231147.1211157.2494.0137875603358317.447239098932
Q3 20231130.0141198.8145.1026801437858316.8519887155138
Q4 20231155.8311186.5665.8466159845167716.6511597332133
Q1 20241127.4731047.7846.0373951305264117.9087483679842
Q2 20241082.5831049.1026.590903422647517.7269703041268
Q3 20241048.6451006.566.8220417777226818.7587426482276
Q4 20241191.5571089.156.2317623076361419.3056052885278
Q1 20251168.6261080.2656.9307888066840922.9867671358417

The rate of return on FDI investment in Ireland and abroad alongside the stock of FDI assets held in Ireland and abroad is presented in Figure 5.9. The rate of return is calculated as FDI income divided by FDI positions. The return on investments in Ireland is significantly higher than the return on investments made abroad. In Q1 2025 the annual rate of return on FDI investment in Ireland was 23% compared to 6.9% on FDI investment abroad.