Nominal Gross Domestic Product (GDP) fell by €6.8bn (5.1%) in Q4 2023, compared to Q4 2022 (see Table 3.1). Adjusted for inflation and seasonal factors (as published in the Quarterly National Accounts), it fell by 3.2% quarter on quarter.
Institutional Sector Accounts for the total economy are presented in current prices, not adjusted for inflation. GDP in Q4 was €124.8bn compared to €131.6bn in the same quarter last year. After accounting for the international flows of investment income, including outflows of profits by foreign multi-nationals, Gross National Income (GNI, B.5g) was €103.6bn, up 4% on the €100bn seen in the October to December period of 2022. As noted in the last chapter, Non-Financial Corporations had significantly higher inflows of income on their overseas investments this quarter, and this boosted GNI.
The consumption of goods and services by households and government (P.3) was €54bn, an increase of €4bn (7%) compared to the fourth quarter of 2022.
Capital investment (P.5) was €48.5bn, 47% higher than the €33.0bn in the equivalent period last year due to large intellectual property imports. After all transactions are included, Ireland was a net borrower (B.9) of €1.6bn in the quarter, compared to net lending €14.3bn in the fourth quarter of 2022, a change of €15.8bn.
Table 3.2 below is set out from the point of view of the rest of the world. That is, income received by Ireland from the rest of the world is shown as a negative.
Ireland had a small current account deficit with the rest of the world (-B.12) of €382m (0.3% of Gross Domestic Product) in the last quarter of 2023, whereas it had a surplus of €15.2bn in Q4 2022. This reversal was largely due to an increase in imports of intangible capital assets (such as intellectual property (IP)). The growth in these R&D related IP purchases from abroad is seen in the service imports (P.72) which are up by €10.9bn to €108.8bn compared to the same period in 2022. The change in goods imports (P.71) was much smaller: these grew 2% to €42.2bn. Taken together then, overall imports were up €11.8bn to €150.1bn.
Exports (P.61 + P.62) declined by €14.1bn to €173.1bn. Goods and services exports went in opposite directions in the quarter. Goods exports (P.61) were €72.0bn in the fourth quarter of 2023, a decrease of €23.8bn compared with the fourth quarter of 2022. This was largely attributable to a reduction in goods for processing of €19.6bn. On the other hand, service exports (P.62) at €101.1bn increased by €9.6bn compared to Q4 2022, mainly due to higher computer services exports (which increased by €9.4bn, see International Accounts Table 2.2).
Higher imports and lower exports both contributed to a worsening balance of goods and services (B.11) for Ireland (a higher balance of goods and services for the rest of the world). This declined from €48.1bn to €22.1bn (a 54% change). Nonetheless, the balance of goods and services is still positive for Ireland: the country exports more than it imports.
The current account balance includes investment income as well as goods and services, and while the goods and services position worsened for Ireland, the investment income (D4) flows improved in the quarter. Investment income earned abroad at €61.0bn, increased by €14.2bn compared with one year earlier while investment income payable to foreign investors at €82.2bn increased by €3.6bn. The overall net investment income for the quarter at -€21.2bn was down by €10.7bn compared with €31.9bn in the same period in 2022. This change was concentrated in the Non-Financial Corporations sector, for which the net investment income transactions improved by €10.0bn.
Further details on transactions with the Rest of the World are provided by institutional sector in the International Accounts, which include the financial accounts as well.
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