This release was updated on 20 April 2023. After the first publication (6 April), data from Government Accounts was significantly revised following dialogue with Eurostat. The largest single item to be changed was capital grants. The EU agency advised that the recording of the Defective Concrete Blocks Grant Scheme should be revised from upfront expenditure in 2022 and instead accrued at the time of approvals. This approach is consistent with other Member States. This affected capital transfers (D.9) paid by government (S.13), which were revised downward for 2022-Q2 from €3,140m to €428m (a revision of €2,711m). Other smaller changes to S.13 data were also incorporated and other sectors adjusted accordingly. Please see the Information Note for further details. We apologise for any inconvenience caused.
The economy as a whole grew in the fourth quarter of 2022, driven by foreign-owned non-financial corporations' higher gross value added. GDP was €130bn, €21bn (19%) higher than 2021-Q4. After outflows to foreign investors, Gross National Income (GNI, B.5g) was €100bn, up €10bn (11%). More information is contained in the Quarterly National Accounts.
The consumption of goods and services by households and government (P.3) was €47bn, an increase of €5bn (10%) compared to the final quarter of 2021. Capital investment (P.5) was €35bn, €6bn lower than the equivalent period last year. After all transactions are included, Ireland was a net lender (B.9) of €14bn to the rest of the world in the quarter: in Q4 2021 it was a net lender of €5bn.
For the year as a whole, GDP was €503bn, an increase of 18% over the previous year, the highest increase since 2015. Pay to workers grew by 11% and consumption by 12%. Capital investment was up 37% and the net outflow of investment income was 34% higher than 2021.
In the fourth quarter of 2022, Ireland's imports were €139bn while exports were €186bn, leaving a trade deficit for the rest of the world (a trade surplus for Ireland) of -€47bn. This deficit for the rest of the world compares to €25bn in the last three months of 2021: the deficit is higher in the latest quarter because of intellectual property imports at the end of 2021.
Since most of these net exports were by foreign-owned corporations, the extra profit they generated from this trade in goods and services flowed out to their owners abroad. Net outflows of investment income (D.4) were €30bn, €11bn greater than the equivalent quarter in 2021. With other changes in current transactions, this left the current external balance (B.12, the negative of the current account balance) at -€16bn. The rest of the world was a net borrower from Ireland (B.9) of €14bn.
Further details on transactions with the rest of the world are provided by institutional sector in the International Accounts, which include the financial account as well.
Total imports in 2022 were €501bn, up €95bn on the 2021 level. Exports grew even more strongly and were €115bn higher at €688bn. This brought the balance of goods and services (B.11) in the year to -€188bn, which was €20bn lower than in 2021. However, net outflows of investment income to the rest of the world increased faster than net exports and were €36bn higher in 2022 than 2021 at €139bn. This left the current external balance €16bn more in favour of the rest of the world at -€44m (from -€61bn in 2021). Overall, Ireland was a net lender to the rest of the world of €36bn in the year.
The current account (CA) balance shows a country's transactions with the rest of the world. It is a key economic indicator. It is given in the International Accounts and in these Sector Accounts. Here, it is shown as the rest of the world's balance with Ireland (B.12), so a negative B.12 for the rest of the world is a positive current account balance for this country. In the case of Ireland's economy, the two biggest components are net exports (P.6-P.7) and net investment income (D.4). A positive CA balance means that Ireland (including, of course, the foreign-owned corporations operating here) exports more than it imports and/or receives more return on investment abroad than it pays out on foreign-owned assets here. In general, a CA balance that is greater than zero is welcome, as it generates a surplus to invest in the rest of the world.
The current account balance can be seen as what is left of gross saving (B.8g) after the country has invested in fixed capital (P.5), hence the equation:
Gross Saving - Investment = Current Account Balance.
Gross Saving minus Investment can be estimated for each sector, indicating the contribution of corporations, government and household to the change in our account with the rest of the world. Since each sector has transactions with other sectors here in Ireland, as well as with the rest of the world, the Saving less Investment for each sector is not equal to that sector's transactions with the rest of the world. However, for the economy as a whole, the equation gives a good indicator of how the CA balance is being generated.
Ireland has a positive current account (CA) balance in the quarter (this is the equal and opposite of B.12 of S.2). The contributions of each sector can be seen in Figure 3.1 (see blue box for explanation). Households continued their high level of saving as the rate established during the pandemic was maintained, while their investment in capital assets such as new homes has not kept pace with growth in incomes. Government saving was also greater than its capital investment in the quarter owing to higher tax income.
Non-Financial Corporations (S.11) were the biggest contributors to the current account surplus. As we saw this sector is dominated by foreign-controlled firms. In previous quarters, a negative current account balance for Ireland has been driven by large investment in intellectual property imports from abroad. Such imports are not present on the same scale this quarter and saving less investment is a large positive for the S.11 sector.
| S11 | S12 | S13 | S1M | CA Balance | |
| 2019Q1 | 8.7949857025 | 0.9076688418 | -1.794876228 | 1.7311213907 | 9.9236121791 |
| 2019Q2 | -36.54115703 | -0.959873224 | 1.0649097371 | 2.9885389292 | -33.49071568 |
| 2019Q3 | 10.791735788 | 1.3912215187 | -1.162014639 | 2.0341769826 | 11.682971905 |
| 2019Q4 | -62.19339627 | 0.2422953049 | 3.9966729122 | -0.059635222 | -58.74102782 |
| 2020Q1 | -49.64760733 | 0.9131762134 | -3.618182956 | 5.9332794187 | -47.49619 |
| 2020Q2 | 4.3507890288 | 0.2246121851 | -6.327299701 | 10.806075501 | 11.23917 |
| 2020Q3 | 11.155039949 | 0.5828893031 | -6.662190248 | 5.4675223731 | 9.98659 |
| 2020Q4 | -2.190544845 | -0.373207753 | -2.080570168 | 3.6055013697 | 0.75965 |
| 2021Q1 | 12.838192013 | 1.2752042228 | -6.094185911 | 9.3045062797 | 17.05388 |
| 2021Q2 | 8.9119307952 | -0.695356235 | -2.089581577 | 7.3798526285 | 16.35933 |
| 2021Q3 | 19.983701443 | 0.8020787151 | -2.630021486 | 6.2970495463 | 22.66628 |
| 2021Q4 | -1.590476417 | 0.7517744409 | 4.4792370852 | 1.8149499909 | 4.58001 |
| 2022Q1 | 5.9684410412 | 1.4210075514 | -0.095932794 | 5.7317000384 | 17.04292 |
| 2022Q2 | 4.9631158366 | -1.679030697 | 1.7809080393 | 6.9750596003 | 15.84803 |
| 2022Q3 | -9.963209721 | -0.519102306 | 2.5445543506 | 5.8302982741 | -4.48046 |
| 2022Q4 | 13.625065929 | -1.973789555 | 4.8766501852 | 2.4011306 | 15.82455 |
