The total debt1 of the private sector2 decreased by 7.4% during 2017 to stand at €716.6bn by year-end. The threshold of 133% of GDP, set as part of the Macroeconomic Imbalance Procedure (MIP), was exceeded again in 2017. Figure 3.1 shows the development of private sector debt since 2007. The contribution from households to total private sector debt – composed mainly of mortgage-related debt – has maintained a steady decline from its peak in 2008 of €202.7bn, falling by €62.5bn in the intervening period.
The debt of non-financial corporations (NFCs) decreased in 2017 by €54.9bn, or 8.7%. In contrast, non-financial corporate debt grew by 70.0% in 2015 which drove the overall increase in private sector debt. This was driven by corporate restructuring both through imports of individual assets and also reclassifications of entire balance sheets in 2015 which meant that the level of capital assets in Ireland increased dramatically compared to 2014 (see National Balance Sheet for Ireland 2015 for further information).
|S.11 Non-Financial Corporations||S.14 + S.15 Households and NPISH||MIP Threshold|
The flow of private sector credit (defined as the sum of consolidated transactions in Table 2.6 - F.3 Debt Securities and F.4 Loans) was -7.5% of GDP during 2017. As shown in Figure 3.2, this was well within the threshold of +14% set under the Macroeconomic Imbalance Procedure. A positive credit flow equates to a net incurrence of debt during the year whereas a negative sign indicates a net running-down of debt during the same accounting period. The negative credit flows occurring in the household sector since 2008, cumulatively amounting to €47.8bn, correspond to a net repayment, primarily, of mortgage related debt.
|Total Credit Flow||MIP Threshold|
A breakdown of the non-financial corporations sector (S.11) financial balance sheet showing large multinational enterprises (MNEs) is presented in Table 2.9.
The total liabilities of the large MNE group, relative to the size of the sector, can be seen in Figure 3.3 (2012-2017). In 2017, large MNEs make up 27.2% of the NFC sector. Note that the percentage of large MNEs is 14.9% in 2014 and increases to 26.5% in 2015, this is related to the increase of capital assets in Ireland in 2015, as discussed above.
Figure 3.4 shows the net financial worth (BF.90) for S.11 proportioned by large MNEs and other non-financial corporations (2012-2017). The trend shows that prior to 2015 much of the net financial worth can be attributed to entities that are not classed as large MNEs (88.1% in 2014), while the substantial change that occurs during 2015 is largely attributed to this large MNE group (increasing from 11.9% in 2014 to 48.2% in 2015 of the total net financial worth). In 2017 this proportion stands at 51.0%.
1Defined as the sum of consolidated stock positions of Table 2.8 - AF.3 Debt Securities and AF.4 Loans.
2Defined as the sum of the S.11 non-financial corporations sector and the S.14 + S.15 households and non-profit institutions serving households sector.