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Foreign Direct Investment

Foreign Direct Investment

Direct Investment Income Outflows decreased by €6bn in Q3 2024

Online ISSN: 2565-6384
CSO statistical publication, , 11am
InflowsOutflows
Q2 202213.23548.293
Q3 20224.81447.59
Q4 202210.37247.701
Q1 202313.6955.304
Q2 202316.8445.703
Q3 202316.49843.823
Q4 202320.340.7
Q1 202417.75848.814
Q2 202417.96443
Q3 202418.83648.988

Direct investment income outflows (earned on investments in Ireland by investors located abroad) were €49bn in the third quarter of 2024, an increase of €6bn compared with the second quarter of 2024. Direct investment income inflows, which represent income earned abroad by investors located in Ireland, were €18.8bn in the third quarter of 2024, an increase of €872m from the previous quarter.

Income on Debt OutflowsReinvested Earning OutflowsDividends & Distributed Branch Profits Outflows
Q2 20222.59138.9546.748
Q3 20223.06425.52918.998
Q4 20223.72411.98831.988
Q1 20233.711-3.37854.97
Q2 20233.739-37.60179.565
Q3 20233.49612.627.727
Q4 20233.9223.69313.087
Q1 20243.1577.26338.395
Q2 20243.0840.25839.658
Q3 20242.5884.25842.142

The composition of direct investment income outflows is presented in Figure 4.2. Income outflows on reinvested earnings were €4.3bn in the third quarter of 2024, an increase of €4bn compared with the second quarter of 2024. Dividends & distributed branch profits outflows at €42.1bn were up €2.5bn on the previous quarter while income on debt outflows at €2.6bn were down €496m.

 

Direct Investment Income Outflowsof which Manufacturingof which Information and Communications
Q2 202248.29330.2997.176
Q3 202247.5934.7787.15
Q4 202247.70130.12111.101
Q1 202355.30436.8779.595
Q2 202345.70324.52712.984
Q3 202343.82324.1110.044
Q4 202340.719.95111.67
Q1 202448.81428.11112.269
Q2 20244323.66910.369
Q3 202448.98831.86111.148

Figure 4.3 illustrates a breakdown of direct investment income outflows between two sectors, manufacturing and information and communications. Of the €49bn in direct investment income outflows in the third quarter of 2024, €31.9bn can be attributed to the manufacturing sector and €11.1bn to the information and communications sector. Manufacturing sector income outflows increased by €8.2bn while information and communications sector income outflows increased by €779m when compared to the previous quarter.

AbroadIn Ireland
Q2 2022-3.873-25.961
Q3 2022-14.08811.006
Q4 2022-19.228-31.184
Q1 202313.325-0.484
Q2 2023-36.523-44.502
Q3 20235.69326.266
Q4 202327.94616.244
Q1 202412.993-1.218
Q2 202414.018-21.684
Q3 20247.58811.261

Foreign direct investment (FDI) transactions abroad and in Ireland are shown in Figure 4.4. Direct investment into Ireland increased by €11.3bn in the third quarter of 2024. Direct investment abroad increased by €7.6bn in the quarter.

AbroadIn Ireland
Q2 20221225.1851383.579
Q3 20221236.1561464.696
Q4 20221210.9991350.229
Q1 20231238.9421320.828
Q2 20231243.2071281.85
Q3 20231227.9491321.016
Q4 20231248.3171299.937
Q1 20241249.3311187.839
Q2 20241286.6751150.428
Q3 20241178.9581060.594

The stock of FDI assets held abroad decreased from €1,287bn in Q2 2024 to €1,179bn in Q3 2024, while the stock of FDI assets held in Ireland decreased from €1,150bn in Q2 2024 to €1,061bn in Q3 2024. FDI assets held abroad by Irish investors decreased by €107.7bn, and FDI assets held in Ireland by foreign investors decreased by €89.8bn.

Net Direct Investment IncomeAll Other Current Account ComponentsCurrent Account Balance
Q2 2022-35.05847.30212.244
Q3 2022-42.77653.71310.937
Q4 2022-37.32945.2147.884
Q1 2023-41.61453.41911.805
Q2 2023-28.86340.21111.348
Q3 2023-27.32545.95518.629
Q4 2023-20.419.88-0.52
Q1 2024-31.05645.94714.891
Q2 2024-25.03660.51735.481
Q3 2024-30.15253.1322.978

The impact of foreign direct investment income on the current account balance is shown in Figure 4.6. In Q3 2024 net direct investment income (FDI income inflows less FDI income outflows) was -€30.2bn while the net of all other current account components (trade in merchandise, services and other income) stood at €53.1bn. The resultant balance was a current account surplus of €23bn.

Net Direct Investment TransactionsAll Other Financial Account ComponentsFinancial Account Balance
Q2 202222.088-18.0414.048
Q3 2022-25.09435.0199.923
Q4 202211.956-1.05610.9
Q1 202313.809-8.0865.723
Q2 20237.979-4.3963.58
Q3 2023-20.57338.9618.387
Q4 202311.702-2.4749.229
Q1 202414.211-3.42110.789
Q2 202435.702-1.50734.196
Q3 2024-3.67326.47222.797

The impact of direct investment transactions on the financial account balance is shown in Figure 4.7. In Q3 2024 there were net flows of -€3.7bn in foreign direct investment transactions while the net contribution from other financial account components (portfolio investment, other investment and reserve assets) was €26.5bn. This contributed to a financial account surplus of €22.8bn.

Net Direct Investment PositionAll Other Net IIP ComponentsNet IIP
Q2 2022-158.394-426.82-585.214
Q3 2022-228.54-407.913-636.453
Q4 2022-139.23-435.535-574.765
Q1 2023-81.886-455.599-537.485
Q2 2023-38.643-507.275-545.918
Q3 2023-93.067-447.985-541.052
Q4 2023-51.62-465.366-516.986
Q1 202461.492-534.36-472.868
Q2 2024136.247-593.753-457.506
Q3 2024118.364-531.542-413.178

The net stock of foreign direct investment assets in the net international investment position (IIP) is shown in Figure 4.8. In Q3 2024 there was a net direct investment position of €118.4bn. Other net IIP components (portfolio investment, other investment and reserve assets) accounted for -€531.5bn. The overall net IIP balance was -€413.2bn.

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)
Q2 20221225.1851383.5793.2742810269469511.7814017125152
Q3 20221236.1561464.6963.2991790680140712.3201674613708
Q4 20221210.9991350.2293.1953783611712314.1723366925166
Q1 20231238.9421320.8283.3989484576356315.057827362836
Q2 20231243.2071281.853.6772637219706815.3136482427741
Q3 20231227.9491321.0164.6744612357679314.574463897485
Q4 20231248.3171299.9375.3935018108381114.2722301157671
Q1 20241249.3311187.8395.7147385280602215.0727497581743
Q2 20241286.6751150.4285.6362329259525515.3279475117087
Q3 20241178.9581060.5946.3495052410688117.1132403162756

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 4.9. 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 Q3 2024 the annual rate of return on FDI investment in Ireland was 17.1% compared to 6.3% on FDI investment abroad.