Macroeconomic Scoreboard 2018

Source Publication: National Income and Expenditure 2018

Get the data: Eurostat database, StatBank N1804

Ireland’s Real GDP growth rates are shown in Figure 3.1. The negative GDP growth rate in 2009 reflects the economic downturn during this period. Ireland experienced increasing GDP growth rates from 2013 to 2015. The substantial jump in GDP in 2015 is mostly due to the relocation of large multinational companies to Ireland, in particular where their net exports are now from their Irish owned enterprises. In 2018, the GDP growth of 8.2% reflects both the continued multinational activity in the country and increased domestic activity.

Supplementary analysis:

Get the data: Eurostat database

Figure 3.2 compares Real GDP growth rates across countries. Ireland’s 2018 Real GDP growth rate was the highest in the EU. Further information from Ireland’s Economic Statistics Review Group can be found here.

^{*Due to individual chain linkages these values do not add up exactly to total GDP growth rates. Values for components are at factor cost. Adding taxes less subsidies provides market costs.}

Source Publication: National Income and Expenditure 2018

Get the data: StatBank N1804

Many sectors, such as industry, have tended to expand and contract in line with positive and negative overall growth. However, some have not. The construction sector continually contracted in size from 2009 to 2012, with a moderate recovery phase in growth terms occurring from 2013 to 2015. Construction growth exhibited a larger increase in years 2016 to 2018 as the demand for property in Ireland increased.

Indicator A2: Net Lending/Borrowing

^{*Note there are some small differences between the CSO/Eurostat Current Account Balance values related to data vintages.}

Source Publication: International Accounts Q2 2019

Get the data: Eurostat database, StatBank ISA04 (Current and Capital Account), StatBank N1805 (GDP)

Net lending/borrowing of a country corresponds to the sum of total current and capital accounts’ balances in the balance of payments. It represents the net resources that the total economy makes available to the rest of the world (if it is positive, i.e. net lending) or receives from the rest of the world (if it is negative, i.e. net borrowing).

Figure 3.4 shows the current and capital account balance as a percentage of GDP for Ireland, the United Kingdom, Germany and the Netherlands. Ireland experienced net borrowing from 2009 to 2012. In 2015, there was a large increase in the current account balance related to corporate restructuring, both for imports of individual assets and also reclassifications of entire balance sheets, resulting in a higher level of net lending than was previously seen. In 2017 and 2018 Ireland experienced net borrowing of 8.3% of GDP and 5.9% of GDP respectively.

Supplementary analysis:

Source Publication: Institutional Sector Accounts Non-Financial and Financial 2018

Get the data: StatBank ISA04

Figure 3.5 shows the net lending/borrowing indicator for each sector, expressed in billions of Euro. Notably in 2010, the government sector was a large net borrower while the financial sector was a large net lender. This was driven by state interventions in the banking sector following the financial crisis. Net borrowing of the government sector has fallen steadily from its 2010 peak of €53.8bn. In 2018, the government sector was a net lender for the first time since the financial crisis, with a value of €0.02bn.

Indicator A3: Residential Construction

Get the data: Eurostat database

This measure refers to the percentage of GDP spent on construction of housing.¹ Residential construction in Ireland fell even more sharply than Spain and Greece until its recovery in 2013. However, it has remained very low relative to some of its major trading partners. Residential construction has grown consistently since its low of 1.4% of GDP in 2015, up to 2.4% of GDP in 2018.

Supplementary analysis:

Get the data: StatBank N1816 (Gross Fixed Capital Formation), StatBank N1824 (GNI*)

Residential construction as a percentage of GNI* (modified GNI excluding globalisation effects) was 4% in 2018. This was 1.6 percentage points higher than residential construction as a percentage of GDP, which was 2.4%. If GNI* for Ireland is comparable to GDP for other countries which are less significantly affected by globalisation, Ireland’s residential construction remains low relative to many of its main trading partners. For further information on GNI* and its calculation see the National Income and Expenditure Annual Results 2018. 

Get the data: Eurostat database

Ireland had the fifth lowest share of residential construction as a percentage of GDP in Europe in 2018. If GNI* for Ireland is comparable to GDP for other countries which are less significantly affected by globalisation, Ireland had the 13th lowest share of residential construction as a percentage of GNI* in 2018.

Indicator A4: People at Risk of Poverty or Social Exclusion

Source Publication: Survey on Income and Living Conditions

Get the data: StatBank SIA12, Eurostat database

Ireland has consistently had a higher risk of poverty or social exclusion when compared to two of its major trading partners, the Netherlands and the UK. This rate increased from 2009 to 2012, but a reversal of this trend has been seen since 2012. In 2017 22.7% of people in Ireland were at risk of poverty or social exclusion, down from 24.4% in 2016. It is important to note that this is a relative measure.

Note: The figures above are consistent with those used by Eurostat. They are not directly comparable to our national figures in StatBank because of the use of different deprivation variables, minor differences in household income definitions, and differences in equivalence scales used to calculate equivalised household size.

Indicator A5: At Risk of Poverty Rate after Social Transfer

Source Publication: Survey on Income and Living Conditions

Get the data: StatBank SIA24, Eurostat database

Similar to the previous measure, Ireland has had a relatively high at risk of poverty rate after social transfer when compared to the Netherlands. In contrast, the consideration of social transfers shifts Ireland's at risk of poverty rate to generally lie below that of the UK, where it was consistently higher than the UK in the previous measure. In 2017, 15.6% of people in Ireland were at risk of poverty after receiving social transfers, down from 16.8%% from 2016.² Again, this is a relative measure.

Note: The figures above are consistent with those used by Eurostat. They are not directly comparable to our national figures in StatBank because of the use of different deprivation variables, minor differences in household income definitions, and differences in equivalence scales used to calculate equivalised household size.

Supplementary analysis:

Get the data: Eurostat database

Ireland had the 11th lowest poverty rate after social transfer in the EU in 2017. 

Indicator A6: Severely Materially Deprived People

Get the data: Eurostat database

Compared to most of its major trading partners, Ireland has a large number of severely materially deprived people. Severe material deprivation is an absolute measure of poverty, where people have living conditions severely constrained by a lack of resources. In 2017, 5.2% of people in Ireland were severely materially deprived, down from 6.7% in 2016.

Supplementary analysis:

Get the data: Eurostat database

Figure 3.13 shows that Ireland had the 13th highest number of materially deprived people as a percentage of total population in the EU in 2017.

Indicator A7: People Living in Households with Very Low Work Intensity

Get the data: Eurostat database

This indicator measures people living in households with very low work intensity. These are people aged 0-59 living in households where the adults (aged 18-59) worked less than 20% of their total work potential during the past year (students are excluded).

Ireland has tended to have a significantly higher rate of people living in households with very low work intensity when compared with some of its major trading partners. This gap was widest in the period 2009 to 2014, and while it has narrowed somewhat since, Ireland still has the highest rate of people living in households with very low work intensity in the EU, at the rate of 16.2% in 2017.

Get the data: Eurostat database

Figure 3.15 shows that Ireland had the highest rate of people living in very low work intensity households in 2017 when compared to other EU countries.

Indicator A8: Labour Productivity

Get the data: Eurostat database

This indicator shows the year-on-year percentage change in real labour productivity per person employed. Small fluctuations in labour productivity were seen for most years up to 2014, with the exception of 2010 which saw a 6.1% increase. An increase of 5.7% was seen in 2014, however the most notable change was seen in 2015. The marked level increase in productivity in 2015 of 20.8% can be attributed to the high GDP growth recorded in this year. More information on this high GDP growth observed in 2015 can be found here. In 2018 the percentage change in labour productivity was 4.8%.

Further information on labour productivity can be found in our Productivity in Ireland publication.

Get the data: StatBank N1804 (GDP Constant Prices), Eurostat (People Employed)

Figure 3.17 shows the breakdown of real labour productivity growth into its components which are change in people employed and change in constant prices GDP. Here it can be seen that the change in GDP has a significant effect on the change in labour productivity. In particular in 2015, when the change in people employed was 3.6% but the 25.2% increase in real GDP resulted in a 20.8% increase in labour productivity. Further information on labour productivity can be found in the CSO publication Productivity in Ireland 2017.

Get the data: Eurostat database

Ireland and Poland had the joint highest rate of growth in labour productivity in the EU in 2018.

Indicator A9: Foreign Direct Investment Flows

Get the data: Eurostat database

Foreign direct investment is a category of cross-border investment made by a resident entity in one economy (the direct investor) with the objective of establishing a lasting interest in an enterprise resident in an economy other than that of the direct investor (the direct investment enterprise). The lasting interest of a direct investor is quantitatively defined as the ownership of 10%, or more, of the voting rights in the direct investment enterprise.

Figure 3.19 shows that flows of direct investment into Ireland decreased from 19.2% of GDP in 2017 to 16.8% of GDP in 2018.

For more information on this see Foreign Direct Investment 2017.

Supplementary analysis:

Get the data: Eurostat database, StatBank BPA16

FDI figures can be calculated in two distinct ways. These two methods are on an asset/liability basis and a directional basis. The above FDI figures, in Figure 3.20, shows the value of FDI flows in 2018 for selected EU countries using both methods.

As seen graphically, the asset/liability and directional methods can give two disparate results. In 2018, FDI inflows to Ireland were 16.8% of GDP using the asset/liability method, in contrast to -7.3% of GDP when using the directional method. 

International statistical manuals recommend interpreting FDI data on a directional basis where items such as intergroup reserve debt are shown on a net basis. For more on this, see the CSO's note on Two Methods of Measuring Foreign Direct Investment.

Indicator A10: Foreign Direct Investment Stocks

Get the data: Eurostat database, StatBank BPQ26

Figure 3.21 shows Inward FDI stocks as a percentage of GDP. This measures total investment in Ireland by foreign multinationals using the two methods explained previously. In 2018, inward FDI stocks were 269.6% of GDP using the directional method and 466.2% using the asset/liability method, meaning a reduction of 27.3% and 12.6%, respectively, over 2017 values.

Supplementary analysis:

Get the data: Eurostat database, OECD

Inward FDI Stocks as a percentage of GDP measure total investment in countries by foreign multinationals. As seen in Figure 3.22, the figures for Ireland and the Netherlands exceed those of other European countries. In 2018, Ireland’s Inward FDI stocks constituted 269.6% of GDP (under the directional method).

Indicator A11: Financial Sector Leverage

Source publication: Institutional Sector Accounts Non-Financial and Financial 2018

Get the data: StatBank IFI03

Figure 3.23 shows the debt-to-equity ratio which is the relative proportion of debt to shareholders' equity used to finance assets. It is defined for balance sheet liabilities as the ratio of the sum of currency and deposits, debt securities, loans, and financial derivatives and employee stock options to equity and investment fund shares. It is closely related to Headline Indicator 11 - Change in Total Financial Sector Liabilities.

Since 2009, there has been a reduction in the financial sector debt-to-equity ratio, mainly driven by the growth of the investment funds sector and the deleveraging of the banking sector. Since 2013, the structure of the balance sheet of the financial sector has evolved such that the leverage ratio has fallen below 100% resulting from more equity than debt in the sector. In 2018 the financial sector debt-to-equity ratio was 63.0%, up from 59.7% in 2017, the first increase since the financial crisis.

Supplementary analysis:

Source publication: Institutional Sector Accounts Non-Financial and Financial 2018

Get the data: StatBank IFI03

Figure 3.24 shows the breakdown of financial sector leverage into its components - debt and equity. The value of debt dropped steadily from 2009 to 2013, but has been fluctuating since, and stands at €1,806bn in 2018. The value of equity has increased consistently since 2009 and stands at €2,865bn in 2018.

Indicator A12: Net IIP Excluding Non-Defaultable Instruments (NENDI)

Get the data: Eurostat

The NENDI indicator is a subset of the Net international investment position (NIIP) that abstracts from its pure equity-related components, i.e. foreign direct investment (FDI) equity and equity shares, and from intracompany cross-border FDI debt, and represents the NIIP excluding instruments that cannot be subject to default. The indicator is based on annual figures from the CSO balance of payments and is defined as the NIIP minus net direct investment minus net portfolio equity. It is calculated as a % of GDP and expressed in national currency.

A13: Household Debt

Source publication: 

Get the data: StatBank N1805 (GDP), StatBank IFI05 (Household Debt)

Household debt was at its peak of 116.2% of GDP in 2009. It has since decreased every year and stood at 41.7% of GDP in 2018, a decrease of 5.1% from the 2017 value of 46.8% of GDP. Notably, the 2018 value for household debt as a percentage of GDP is less than half of the 2009 value.