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 €4.0bn in the last quarter of the year. This is the first quarter since 2019 that the government has not run a deficit. On the income side, revenue from taxation usually peaks in the last quarter, and in 2021 it was €25bn, €5.6bn greater than this quarter last year. Higher earnings, higher profits and higher consumer spending all increase the Revenue Commissioners' receipts. On the expenditure side, the government supported household incomes, as mentioned above, 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 at a similar level to those of 2020-Q4, while social transfers were €1.4bn lower, but still well above their pre-pandemic levels. Government spending on providing services such as health and education directly (P.3) was €0.5bn higher than this quarter last year.
For the year as a whole, the government deficit was €7.2bn, much less than the €18.5bn of 2020. Like the last quarter, the total year owed its improved result to higher taxation income: VAT-type taxes (D.2) were €4.8bn (17%) higher in 2021, while taxes on income and wealth (D.5, which includes PAYE and corporation tax) were up €8.1bn (18%). Government finances were also improved by overall decreases in pandemic-related subsidies and unemployment payments.
| Government balance (B.9)/quarterly GDP | |
| 2018Q1 | -2.23 |
| 2018Q2 | -0.34 |
| 2018Q3 | -1.99 |
| 2018Q4 | 4.48 |
| 2019Q1 | -2.35 |
| 2019Q2 | 0.92 |
| 2019Q3 | -1.24 |
| 2019Q4 | 4.05 |
| 2020Q1 | -3.78 |
| 2020Q2 | -7.28 |
| 2020Q3 | -6.53 |
| 2020Q4 | -2.32 |
| 2021Q1 | -6.32 |
| 2021Q2 | -2.27 |
| 2021Q3 | -2.22 |
| 2021Q4 | 3.78 |
Non-Financial Corporations (S.11)
The Gross Value Added (GVA, B.1g) of Non-Financial Corporations, which drives Ireland's GDP, was €9.9bn (15%) higher in the final quarter of 2021 compared to the equivalent quarter in 2020. This increase of GVA was due to €1.7bn growth in pay to employees (D.1) and a rise of €7.8bn in profits (B.2A3G). The sector had large investment (P.5) in imported intellectual property in the quarter: something that was seen a lot in 2019 and 2020 but not in previous quarters of 2021. Overall, this left the non-financial corporations as net borrowers of €4.6bn in the period.
Much of the growth in the last quarter, as in the year as a whole was among the foreign-dominated corporations. These enterprises, mainly in the manufacturing and IT areas, have continued to grow throughout the pandemic, as Figure 2.2 below illustrates. In contrast, economic sectors dominated by domestically-owned companies (such as hospitality and transport) contracted sharply with the arrival of COVID-19. As we can see from Figure 2.2, the non-MNE-dominated sectors recovered most (but not all) of the GVA in 2021 that they lost in 2020. The Quarterly National Accounts show gross value added by economic activity (NACE A10) with analysis of the multi-national dominated sectors.
| 2020 | 2021 | |
| Foreign-owned Enterprise dominated | 25.3748661753444 | 34.1225806647571 |
| Other | -11.4108924900856 | 10.4015728483829 |
Financial Corporations (S.12)
Financial corporations (S.12) had net property income (D.4) in the last quarter of 2021 €0.8bn higher than the same quarter of 2020, but they also paid €0.6bn more in corporation tax. These were the main contributors to the change of €0.4bn in their gross saving (B.8g). 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.
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