This release has been compiled during the COVID-19 crisis. The results contained in this release reflect some of the economic impacts of the COVID-19 situation. For further information see our Information Note.
Government (S.13)
The government surplus (net lending, B.9) was €282m in the first quarter of 2022. This compares to a deficit of €6,382m in the first quarter of last year. The improved position was due to both higher revenues and lower expenditure.
On the income side, revenue from taxation was up due to higher consumer spending, higher earnings, and higher profits. Taxes on products and production (D.2) were up €1.4bn (19%) on Q1-2021. This is mostly VAT, which increases when household consumption accelerates. Taxes on income and wealth (D.5) grew by €2.7bn (38%), as households paid €1.4bn more income tax and companies paid €1.3bn more corporation tax. Taxes on income and wealth are highly seasonal and most come in the second or fourth quarter of the year. The €9.7bn received in Q1 of this year is the highest ever in a first quarter, and the tax paid by non-financial corporations this quarter is even higher than their peak Q4 payment eight years ago.
On the expenditure side, during COVID-19 the government outgoings were increased to support household incomes affected by restrictions. As mentioned in the previous chapter, this was through social transfers (D.62) such as the Pandemic Unemployment Payment, and through subsidies (D.3), such as the Employment Wage Subsidy Scheme. Subsidies were €1,157m in the first quarter of 2022, down from €1,664m in the first three months of last year, while social transfers were €6,534m, down from €8,228m but still above their pre-pandemic levels.
| Government balance (B.9)/quarterly GDP | |
| 2019Q1 | -2.30 |
| 2019Q2 | 1.01 |
| 2019Q3 | -1.15 |
| 2019Q4 | 4.03 |
| 2020Q1 | -4.15 |
| 2020Q2 | -7.98 |
| 2020Q3 | -6.56 |
| 2020Q4 | -1.90 |
| 2021Q1 | -6.31 |
| 2021Q2 | -2.31 |
| 2021Q3 | -2.11 |
| 2021Q4 | 3.79 |
| 2022Q1 | 0.24 |
Non-Financial Corporations (S.11)
The Gross Value Added (GVA, B.1g) of Non-Financial Corporations, which drives Ireland's GDP, was €10.5bn (12%) higher in the first quarter of 2022 compared to the equivalent quarter last year. GVA is made up of compensation of employees (D.1) and gross operating surplus or profit (GOS, B.2A3G): pay to workers made up €2.8bn of the increase in value added, while profit was up €7.1bn.
The growth in the value added of Non-Financial Corporations was spread across economic activity sectors. The products and services dominated by foreign-multinationals such as Industry and Information & Communications Technology, showed large growth on a high base. In the first quarter of 2022, domestic-dominated sectors such as Distribution, Transport, Hotels & Restaurants also grew as the last of the COVID-19-related restrictions were removed.
| Change since Q1 2021 | |
| Industry (excl. Construction) | 5.25 |
| Construction | 0.60 |
| Distribution, Transport, Hotels & Restaurants | 2.06 |
| Information & Communication | 1.69 |
| Professional, Admin & Support Services | 1.43 |
| Arts, Entertainment & Other Services | 0.21 |
Financial Corporations (S.12)
Financial corporations (S.12) showed high gross value added in the first quarter of the year, which was mainly due to increasing compensation of employees. The investment income resources (received) and uses (paid) of the sector, which are much higher than their value added, also grew in the quarter. Their resources grew faster than their uses and this contributed to their higher gross saving. Most of the investment income of S.12 relates to transactions with the rest of the world and further details are given in the International Accounts.
