International Accounts Q1 2025 Final

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.

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.

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.

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.

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.

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.

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.

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.

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.