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Key Findings

Domestic economy strengthened in 2021

Online ISSN: 2009-5597
CSO statistical publication, , 11am

Key Findings

The Irish economy grew in 2021 resulting in a wealthier household sector.

  • Households added €32bn to their wealth in 2021.

  • Households continued to decrease their borrowings, and the debt-to-income ratio fell below the ratio for the EU overall for the first time in the twenty-one-year series.

  • Household net wealth held in financial assets stood at €366bn at the end of the year, up from €318bn at the end of 2020. This is in addition to wealth held in assets such as houses.

  • Government net borrowing was €7bn in 2021 as it continued to respond to the pandemic, this compared with €19bn in 2020.

  • Assets held in Ireland by the financial sector continued to grow and reached almost €8 trillion.

  • Private sector debt continued to decline towards the EU target threshold. 

Statistician's Comment

The Central Statistics Office (CSO) has today (01 November 2022) released the Institutional Sector Accounts, Non-Financial and Financial 2021. Commenting on the release, Lucia Perez Alfaro, Statistician in the International Accounts Division said: “Today's release shows that households added €32bn to their wealth in 2021, compared with €34bn over all three years 2017-2019. This increased level of saving was a result of incomes increasing while spending remained suppressed owing to the pandemic. Household consumption recovered slightly in 2021, which was the second year affected by the COVID-19 pandemic, but it did not keep pace with rising household incomes, as more people were in work and wages were going up. Household net wealth held in financial assets stood at €366bn at the end of the year, more than three times its level 20 years ago. Indebtedness also declined as the household debt-to-income ratio fell below that of the EU overall. 

Private sector debt decreased to 168% of Gross Domestic Product (GDP) in 2021, continuing the declining trend started in 2016, but remaining above the EU target threshold of 133%. Households debt declined again this year to 30% of GDP. The debt of non-financial corporations declined to 138% of GDP in 2021, with an increase in the amount of debt of non-financial corporations offset by the increase of GDP in the year.

Economic Performance of Non-financial and Financial Corporations

Today's release also shows other sectors of the economy also performed strongly. Companies posted record profits in the year, yielding €13bn in corporation tax for the Irish government. Most of these profits were generated by foreign-owned multi-nationals (MNEs), and today's publication provides a breakdown of the accounts separating these MNEs from the domestic firms. The foreign-owned firms paid €31bn to their workers in 2021, or 28% of all wages and salaries, a proportion that has been increasing in recent years. While domestic firms shrank in 2020, these foreign firms continued to grow their workforce, and increased their share of the labour market.

The financial sector continued to expand, driven by growth across all financial sub-sectors, with total assets heading towards €8 trillion. The investment funds (non-money market) make up the largest part of these assets managed here."

Editor’s Note

These accounts published today show the economic situation for the separate sectors of households, corporations (financial and non-financial, domestic, and foreign-owned), and government. They integrate the profit and loss account (non-financial account) for each sector with changes in their balance sheets (financial account). They thus provide the most detailed integrated picture of the Irish economy.