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.
The standard of living measured as real Total Disposable Income declined in the third quarter (Q3) of 2022, and in three of the last four quarters. This is down from a peak in the third quarter of 2021 which was the highest level in the 24-year series.
Household earnings were up in Q3 2022 as more people were in work, but inflation outpaced this growth, leaving real income lower.
Household consumption grew partly due to high inflation, but also because more goods and services were used.
Households saved 19% of their income in Q3 2022, down from 20% in Q2 2022. Before the pandemic, households saved around 10% of their total disposable income, so 19% is still well above the long-term average.
The Gross Value Added of Non-Financial Corporations, which drives Ireland's Gross Domestic Product (GDP), was €18bn (21%) higher in Q3 2022 compared with the equivalent quarter of 2021.
Corporations continued to bring large assets of intellectual property onshore here: these assets are used in global production chains, the profit from which will flow through Ireland.
The large imports of intellectual property made Ireland a net borrower from the rest of the world in the quarter: in the past these imports have contributed to production, creating more net lending in the longer term.
The Central Statistics Office (CSO) today (10 January 2023) released the Institutional Sector Accounts Non-Financial for Quarter 3, 2022.
Commenting on the release, Peter Culhane, Statistician in the National Accounts Analysis and Globalisation Division of the CSO said:
"With higher inflation in recent quarters, real disposable income has been declining. This has been a slow reduction in living standards, as wages continued to rise but did not keep pace with prices.
Household spending continued to grow in part due to inflation but also due to households consuming more goods and services. The saving rate declined in July, August, and September (Q3) 2022 but was still well above its long-term average of around 10% pre-pandemic.
The economy more widely grew in the quarter. This expansion was dominated by foreign multinationals here, but domestically-owned corporations also saw some increase in value added.
This improved situation fed into the government's net lending, as taxation income grew, and expenditure declined due to fewer pandemic supports being in place."