Direct investment income outflows (earned on investments in Ireland by investors located abroad) were €18bn in the fourth quarter of 2018, a decrease of €1.9bn compared with the fourth quarter of 2017. Direct investment income inflows, which represent income earned abroad by investors located in Ireland was €2.9bn in the fourth quarter of 2018, down €3.9bn compared to the same period in 2017.
|Income on Debt Outflows||Reinvested Earnings Outflows||Dividends & Distributed Branch Profits Outflows|
The composition of direct investment income outflows is presented in Figure 4.2. Income outflows on reinvested earnings were €12.5bn in the fourth quarter of 2018, with dividends & distributed branch profits outflows at €3.8bn and income on debt outflows at €1.7bn.
Foreign direct investment transactions abroad and in Ireland are shown in Figure 4.3. Direct investment into Ireland increased by €19.7bn in the fourth quarter of 2018. This change was driven by increases in equity of €9bn and other capital of €12.5bn. Direct investment abroad increased by €39.7bn in the quarter, mainly due to increased equity investment of €62bn.
The stock of FDI assets held abroad decreased from €823.7bn in Q3 2018 to €796.6bn in Q4 2018, while the stock of FDI assets held in Ireland increased from €750.9bn in Q3 2018 to €794.3bn in Q4 2018.
|Net Direct Investment Income||All other Current Account Components||Current Account Balance|
The impact of foreign direct investment income on the current account balance is shown in Figure 4.5. In Q4 2018 net direct investment income (FDI income inflows less FDI income outflows) was -€15bn while the net of all other current account components (trade in merchandise, services and other income) stood at €15.2bn. The resultant balance was a current account deficit of €0.2bn.
|Net Direct Investment Transactions||Other Financial Account Components||Financial Account Balance|
The impact of direct investment transactions on the financial account balance is shown in Figure 4.6. In Q4 2018 there was a net surplus of €19.9bn in foreign direct investment transactions while the net contribution from other financial account components (portfolio investment, other investment and reserve assets) was -€31.7bn.
|Net Direct Investment Position||Other Net IIP Components||Net IIP|
The net stock of foreign direct investment assets in the net International Investment Position (IIP) is shown in Figure 4.7. In Q4 2018 there was a net direct investment position of €2.3bn. Other net IIP components (Portfolio Investment, Other Investment and Reserve Assets) accounted for -€455.4bn. The overall net IIP balance is -€453.1bn.
|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)|
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 4.8. The return on investments in Ireland is significantly higher than the return on investments made abroad. In Q4 2018 the rate of return on FDI investment in Ireland was 9.4% compared to 2.3% on FDI investment abroad.
Next Chapter >> International Investment Position