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Government and Corporations

Government and Corporations

Government surplus of €8.5bn in 2023, including €5.9bn in the fourth quarter

CSO statistical publication, , 11am

Government (S.13)

The final quarter of the year usually produces the biggest surplus for government as more tax is due in this quarter than other quarters. The government surplus (net lending, B.9) was €5.9bn in the last quarter of 2023 (see Table 2.1, below). This was up from a surplus of €5.4bn in the equivalent quarter of 2022.

Turning to the annual totals for 2023 (see Table 2.2), the government surplus was €8.5bn in 2023 (1.7% of Gross Domestic Product). This was down slightly from €8.6bn in 2022. The surplus declined despite an increase of €4.2bn in tax take (€1.3bn in VAT-type D.2 taxes and €3.0bn in corporation and income D.5 tax). Public service current spending (P.3) grew from €57.6bn to €62.1bn, an increase of €4.4bn or 7.7%. The capital investment (P.5) by government went up 12% to €11.7bn in 2023.

Detailed Government Finance Statistics will be published later this month.

Government balance (B.9)/quarterly GDP
2021Q1 -6.05
2021Q2 -2.40
2021Q3 -2.25
2021Q4 4.13
2022Q1 -0.25
2022Q2 1.18
2022Q3 1.50
2022Q4 4.10
2023Q1 0.70
2023Q2 1.35
2023Q3 0.04
2023Q4 4.69
Table 2.1 S.13 General Government Quarterly

Table 2.2 S.13 General Government Annual

Non-Financial Corporations (S.11)

The Gross Value Added of Non-Financial Corporations declined by €9.2bn in the final quarter of 2023 compared to the same period in 2022 (see Table 2.3). This contributed to the decline in GDP for the country as a whole.

The change in GVA by activity is illustrated in Figure 2.2. There was a decrease of GVA in Industry of €11.7bn. As shown in the following chapter, much of this decline related to manufacturing carried out abroad on behalf of corporations resident in Ireland (contract manufacturing, producing exports of goods for processing). This decline was partly offset by growth of €2.1bn in the Information & Communication sector. The domestically-focused sectors of Construction and Arts, Entertainment & Other Services added slightly less value than in the last quarter of 2022, while Distribution, Transport, Hotels & Restaurants saw growth of €0.75bn in value added.

Although overall GVA declined by €9.2bn, its labour element (Compensation of Employees, D.1) increased by €1.5bn; its capital element (Gross Operating Surplus, profit, B.2A3G) decreased by €10.7bn. Lower profit meant lower outflows of investment income (D.4), which saw a decline of 5.8bn. The sector received large income inflows from abroad on its investments (up €4.1bn from €13.6bn to €17.7bn). Capital investment (P.5) was €39.5bn (up €14.9bn on Q4 2022), an increase seen in the growth in imports of Research & Development Services in the International Accounts.

For Non-Financial Corporations, the year 2023 as a whole (see table 2.4) showed a similar trend over the previous year as the final quarter. Gross Value Added (B.1G) declined by €10.5bn (3%), which was made up of an increase of €6.9bn in compensation of employees (D.1) and a decline of €18.5bn in Gross Operating Surplus (B.2A3G). There was a very significant increase in the flow of investment income to these companies from abroad: this was up 63% from €38.1bn to €62.1bn. The large capital investment (P.5) in the final quarter brought overall investment for the year up 12% over 2022, from €97.5bn to €109.1bn. The sector was a net lender of €31.2bn in 2023, down from €42.2bn in the previous year.

Change since 2022Q4
Industry (excl. Construction) -11.69
Construction -0.02
Distribution, Transport, Hotels & Restaurants 0.75
Information & Communication 2.12
Professional, Admin & Support Services -0.11
Arts, Entertainment & Other Services -0.13
Table 2.3 S.11 Non-Financial Corporations Quarterly

Table 2.4 S.11 Non-Financial Corporations Annual

Financial Corporations (S.12)

The flows of investment income of Financial Corporations, both in and out, grew by a more than a third in Q4 2023 compared to Q4 2022. These increases reflect higher interest rates by central banks, as well as greater activity in the sector. 

Most of the flows related to assets held overseas, and the net investment income on gross flows of €95bn was around €1bn. As we can see from the International Accounts Table 1.5, the investment income (primary income) was mostly paid and received by Other Financial Intermediaries, such as non-pension investment funds. Thus, while the value of transactions was very high in the sub-sector, they have a more limited impact on the domestic economy.

However, these corporations did leave significant amounts in the Irish economy: they paid €1.1bn in tax and €2.6bn in compensation of employees (D.1) in the quarter.

In 2023 as a whole, financial corporations received €177bn in investment income and paid €182bn. They added €18bn in Gross Value Added, which was made up of €10bn in compensation of employees (D.1), €7bn in gross operating surplus (B.2A3G) and €1bn in taxes less subsidies on production. These are increases over the previous year of 51% in investment income, and more modest increases of 9% in compensation of employees and 10% in gross operating surplus.

Table 2.5 S12 Financial Corporations Quarterly

Table 2.6 S12 Financial Corporations Annual