Source publication: International Accounts Q2 2021

Get the data: PxStat BPQ15 (Current Account), PxStat N2005 (Gross Domestic Product)

The current account balance is mainly driven by exports less imports, although it also includes net income and current transfers in and out of Ireland, as shown in the CSO note on Trends in Net Factor Income. As part of the Macroeconomic Imbalance Procedure (MIP), the current account balance is expressed as a percentage of GDP and presented as a three-year average. A positive current account balance usually indicates that exports are greater than imports, and vice versa. From 2011 to 2014, Ireland ran a current account deficit (measured as a three-year average). The value of this indicator increased year on year from 2011-2015. A current account surplus was recorded in 2015 as a result of the relocation of companies to Ireland and their associated contract manufacturing exports. The modest but increasing current account surpluses from 2016 to 2018 were followed by a current account deficit in 2019, the first in six years. This deficit was mainly due to increased R&D related IP imports. In 2020, the deficit has further increased to 5.9% of GDP (measured as a three-year average), breaching the MIP threshold for the second consecutive year. 

Supplementary analysis:

Get the data: Eurostat database

The real effective exchange rate (REER) is a country’s exchange rate relative to a basket of exchange rates of other countries weighted according to their respective trade shares. A change in it, therefore, aims to assess a country's price or cost competitiveness relative to its principal competitors in international markets. A positive value indicates real appreciation and a loss of country competitiveness relative to principal trading partners. A negative value indicates improving country competitiveness relative to its principal trading partners. Changes in cost and price competitiveness depend on cost and price trends as well as exchange rate movements. This indicator is expressed as a three-year percentage change, deflated by the consumer price indices relative to a panel of 42 countries. From 2011 to 2012, the lower MIP threshold of -5% was breached, followed by a recovery period during 2013 and 2014. The indicator again breached the lower threshold each year from 2015 to 2017. The three-year percentage change in REER in 2020, at -1.2%, breached neither the upper nor the lower MIP thresholds, for a third consecutive year.

Supplementary analysis:

Get the data: Eurostat database, IMF database

The pattern of Ireland’s REER has been similar to other Euro area countries and to the EU-27 average, although Ireland's indicator values tend to lie lower than most of its European counterparts. In contrast, Ireland's REER trend has been very different to those of the United Kingdom and the USA where other currencies are in circulation. It is important to note that data on the UK and the USA is from a different data source to Eurostat and therefore is not fully comparable. The indicators for the UK and the USA are computed using data from the IMF database.

Get the data: Eurostat database

Figure 2.7 shows the three-year percentage changes in REER values for the EU-27 in 2020. Ireland, at -1.2%, had the third most negative value. Hungary reported the largest decrease, with a value of -4.9%, while Bulgaria experienced the largest increase at 7.1%.

Indicator 4: Export Market Share

Source publication: International Accounts Q2 2021

Get the data: Eurostat database

The export market share is calculated by dividing the exports of the country by the total exports of the world. For a country to increase its export market share its exports must increase at a faster rate than world exports. As a result, a country’s exports may increase but its export market share may still fall. To capture the structural losses in competitiveness that can accumulate over longer time periods, this indicator is calculated as the percentage change in values compared to five years previously.

Ireland experienced a negative export market share (taken as a five-year percentage change), and breached the MIP threshold, each year from 2011 to 2014. This equates to a decrease in Ireland's exports relative to total world exports. This trend changed in 2015, when the indicator value rose to 37.6%. The change largely relates to the amount of contract manufacturing carried out on behalf of Irish companies. The rise in contract manufacturing has led to the increase in goods exports from Irish companies, and is explained in the Contract Manufacturing Information Notice (PDF 516KB)  published by the CSO. The export market share indicator has shown positive 5-year percentage changes from 2015 onwards, most recently 50% in 2020. While remaining positive, the indicator value of 50% in 2020 was significantly lower than the 2019 value of 73.4%. This is again a reflection of the level change in contract manufacturing seen in 2015, with the 2015 value being the denominator of the 2020 five year percentage change.

Supplementary analysis:

Get the data: Eurostat database

Ireland had the highest export market share indicator value in the EU in 2020, at 50%. This reflects Ireland's highly globalised economy and is partly driven by high levels of computer services exports.

Get the data: Eurostat database, World Bank database

Figure 2.10 shows Ireland’s change in export market share relative to three of its largest European trading partners and China. From 2011 to 2014 Ireland and the other EU countries show negative export market share indicator values, breaching the MIP threshold of -6%. Conversely, China showed strong positive changes in export market share from 2011-2016, although these changes have declined significantly since 2016 to stand at 3.3% in 2020. Note that the country comparison data is sourced from Eurostat, with the exception of the data for China and the UK which is sourced from the World Development Indicators compiled by the World Bank.

Indicator 5: Nominal Unit Labour Cost

Source publication: National Income and Expenditure 2020

Get the data: PxStat N2001 (Employee Compensation/Total Labour Costs), Eurostat database (Total Employment, Number of Employees), Eurostat database (GDP at Market Prices)

The nominal unit labour cost is an index computed using the ratio of labour costs (compensation per employee) to labour productivity (GDP per person employed, including self-employed). A rise in an economy’s nominal unit labour cost index corresponds to an increase in labour costs relative to labour productivity, resulting in lower competitiveness. This Macroeconomic Scoreboard indicator is presented as a three-year percentage change.

Ireland has not breached the MIP threshold for this indicator at any point during the period 2011-2020. The indicator value has been consistently negative, which would indicate increasing competitiveness for Ireland, however it should be noted that large negative values of this indicator from 2015 to 2017 were substantially affected by the level-shift in GDP in 2015. In 2020, the three-year change in Ireland’s nominal unit labour cost was -6.3%. 

Supplementary analysis:

Get the data: PxStat N2001 (Employee Compensation/Total Labour Costs), Eurostat database (Total Employment, Number of Employees), Eurostat database (GDP at Market Prices)

Breaking nominal unit labour cost into its two components shows the interrelationship between labour costs and productivity. Since 2011, the three-year percentage changes in labour costs have been consistently lower than those in labour productivity. From 2011 to 2012, and again from 2015 to 2017, labour productivity increased at a significantly faster rate than labour costs, resulting in sharp declines in nominal unit labour costs and increasing overall economic competitiveness. The gap between labour productivity growth and labour cost growth was narrower from 2013 to 2014 and again from 2018 to 2020.  This resulted in smaller decreases in nominal unit labour costs and more moderate growth in overall economic competitiveness during these periods. It should be noted that labour productivity increases from 2015 to 2017 were mainly due to the large increase in GDP in 2015.

For more information on Labour Productivity, please see Auxiliary Indicator A8 Labour Productivity in the Auxiliary Indicators chapter.

Internal Indicators

Indicator 6: Deflated House Price Index

Source publication: Residential Property Price Index, August 2021

Get the data: PXStat HPA06 (Residential Property Price Index), PxStat N2005 (Consumption at Current Market Prices by Item and Year), PxStat N2006 (Consumption at Constant Market Prices by Item and Year)

The deflated house price index is the ratio between the residential property price index and the national accounts deflator for private final consumption expenditure for households. This year-on-year percentage change indicator measures inflation in the housing market relative to inflation in the final consumption expenditure of households. The national accounts deflator for private final consumption expenditure is obtained by dividing final consumption expenditure of households at current market prices (79a) by final consumption expenditure of households at constant market prices (92a). The deflated house price index is then calculated by dividing the house price index by this deflator. These series are chain linked to 2015 for comparability across countries.

Figure 2.13 shows that Ireland experienced decreases in the deflated house price index from 2011 to 2012, following the financial crisis. A turning point was seen in 2013, with neither an increase nor a decrease in deflated house prices over the year. From 2014 to 2018, Ireland saw large increases in the deflated house price index and breached the MIP threshold of 6% in each of these years. These increases show that there was higher inflation in the Irish housing market relative to the final consumption of households. In 2019 and 2020, the deflated price index showed almost no year-on-year change, with changes of 0.3% and -0.2% respectively. This was a result of similar levels of inflation being seen for house prices as those of final consumption expenditure of households in general, approximately 2% for both in 2019, and amounts close to zero for both in 2020.

Get the data: PxStat HPA06 (Residential Property Price Index), PxStat N2005 (Consumption at Current Market Prices by Item and Year), PxStat N2006 (Consumption at Constant Market Prices by Item and Year)

Figure 2.14 shows a comparison of the year-on-year percentage change in the deflated house price index between Dublin and the rest of the country. In 2011 and 2012, Dublin experienced smaller decreases in the deflated house price index compared to the rest of the country. This trend continued into 2013 and 2014 as house prices began to recover post-recession, with Dublin experiencing faster growth in the deflated house price index compared to the rest of Ireland. From 2014 to 2018, the deflated house price index both for properties within and outside Dublin increased, with prices outside Dublin increasing at a faster rate than prices in Dublin from 2015. In 2020 the annual percentage change in the deflated house price index for Dublin was negative (-1%), while the corresponding figure for properties outside Dublin remained positive (0.6%).

Indicator 7: Private Sector Credit Flow

Source publication: Institutional Sector Accounts Non-Financial and Financial 2020

Get the data: PxStat IFI04

Private sector credit flow represents the net amount of liabilities (loans and debt securities) which non-financial corporations (NFCs, S.11), households (S.14) and non-profit institutions serving households (NPISH, S.15) have incurred during the year. Transactions between units within each sector are eliminated to produce a consolidated presentation. The indicator is expressed as a percentage of GDP.

Figure 2.15 shows the indicator has been below the MIP threshold since 2012. The threshold breach in 2011 was caused principally by refinancing operations of large multinational groups during this period. In 2020, private sector credit flow was -1.8% of GDP, below the MIP threshold of 14%.

Supplementary analysis:

Source publication: Institutional Sector Accounts Non Financial and Financial 2020

Get the data: PxStat IFI05

Private sector debt is the stock of liabilities in the form of loans and debt securities held by non-financial corporations (NFCs, S.11), households (S.14) and non-profit institutions serving households (NPISH, S.15). Positions between units within each sector are eliminated to produce a consolidated presentation. This reflects the amount of funds that the sector receives from other sectors. The indicator is expressed as a percentage of GDP, as shown in Figure 2.17. For Ireland, this indicator has exceeded the threshold of 133% every year since 2001 (the first year of availability for this time series) and stood at 189% of GDP at the end of 2020.

Supplementary analysis:

Source publication: Government Finance Statistics October 2021

Get the data: PxStat GFQ13 (Government Debt), PxStat N2024 (GDP)

General government gross debt (GG debt) consists of liabilities in the financial instruments of currency and deposits (AF.2), debt securities (AF.3) and loans (AF.4). The scoreboard indicator is the ratio of GG debt to GDP, which is the standard approach to comparing public debt internationally. It should be noted that the MIP threshold is set at the same level as the Stability and Growth Pact Treaty obligations (see Stability and Growth Pact chapter).

The GG Debt level has been strongly influenced by the financial crisis, the most significant factor being the state interventions in the banking sector from 2009 onwards. For more see file: Ireland - Impact of Government Support for Financial Institutions October 2021 (XLS 24KB) (Source: CSO).

The GG debt ratio grew from 2011 to its peak in 2013, of 120%, and has decreased every year since. In 2014, the Irish state repaid approximately €9bn of the borrowings provided by the IMF, thus reducing both the ratio and level of debt. The decline in the GG debt ratio of 28 percentage points in 2015 is primarily due to the exceptional level of growth in GDP that year. The ratio has continued to decrease in subsequent years, again more as a result of GDP increases than any substantial reduction in the monetary value of debt. By the end of 2020, GG debt as a percentage of GDP had reduced to 58.4%, below the MIP threshold for the second consecutive year. The value of GG debt in 2020 stood at €217.9bn, following a €13.9bn increase in debt over the year, emphasising the strong role GDP increases are playing in the annual movements in this indicator value.

Supplementary analysis:

Source publication: National Income and Expenditure 2020

Get the data: PxStat GFQ13 (Government Debt), PxStat N2024 (GDP, GNI*)

Figure 2.21 shows GG debt both as a percentage of GDP, and as a percentage of GNI* (modified GNI excluding globalisation effects). Presenting debt in the context of GNI* can be more useful for analytical comparisons and, in particular, as a measure of the debt burden. In 2015, there was a significant change in the differential between government debt as a percentage of GDP and that as a percentage of GNI*, as a result of the substantial jump in GDP during the year. The difference between government debt as a percentage of GDP and government debt as a percentage of GNI* stood at 47.3% in 2015. The value of government debt decreased by less than 1% in 2015, while GDP and GNI* increased by 35% and 9% respectively.

Again, between 2015 and 2019, the reduction in government debt as a percentage of GDP/GNI* is mainly a result of increases in the values of GDP and GNI*, with the level of government debt in monetary terms at the end of 2019 higher than it had been in 2015. In 2020, GG debt as a percentage of GNI* increased by over 10% to stand at 104.7% at the end of the year. This increase came from a combination of GG debt increasing by 6.8% in monetary terms and GNI* decreasing by 3.4%. In contrast GG debt as a percentage of GDP moved much less in the same year, with a change of 1.2% seen as increased debt levels were somewhat offset by GDP increases over the year. For further information on GNI* and its calculation see the National Income and Expenditure 2020.

Source publication: Government Finance Statistics October 2021

Get the data: PxStat GFQ13 (Government Debt), PxStat N2024 (GDP)

Figure 2.22 shows a breakdown of general government debt into its constituent debt instruments, each shown as a percentage of GDP. The significant increase in loan liabilities during the years 2011-2013 is predominantly a result of the EU-IMF programme of financial support. The decline in the size of currency and deposits between 2012 and 2015 is mainly related to the liquidation of Irish Bank Resolution Corp (IBRC). IBRC had been reclassified into the government sector from mid-2011 as a result of the financial crisis. Between 2015 and 2019, all debt instruments experienced a decrease as a percentage of GDP. In 2020, debt securities as a percentage of GDP increased by 2.1%, showing increased reliance on debt securities to fund remedial measures taken in response to COVID-19. 

Source Publication: National Income and Expenditure 2020

Get the data: PxStat N2024 (IE GDP), PxStat GFQ13 (IE Government Debt), Eurostat database 

Expressed as a percentage of GDP, Ireland’s general government gross debt (58.4% of GDP) is mid-table, or 13^th lowest, when compared to other EU member states. In contrast, Ireland's GG Debt as a percentage of GNI* (modified GNI excluding globalisation effects) was 104.7%. If GNI* for Ireland is comparable to GDP for other countries which are less significantly affected by globalisation, then Ireland had the eighth highest level of government debt as a ratio of economic activity in the EU in 2020.

Indicator 10: Unemployment Rate

Source publication: Labour Force Survey Q2 2021

Get the data: PxStat QLF02

The unemployment rate is the percentage of people in the labour force who are unemployed. The indicator is derived as a three-year average based on the reference year plus the previous two years.

This indicator exceeded the MIP threshold from 2010 to 2016 (Figure 2.24). Unemployment has exhibited a downward trend since 2012, dropping below the threshold in 2017. The unemployment rate was 5.5% in 2020, the lowest level over the 10-year period.

Supplementary analysis:

Get the data: PxStat QLF04

Figure 2.25 shows the number of unemployed people, as a three-year average, broken down by age, illustrating the share of those who are younger than 25 and those who are aged 25 and over. The number of unemployed people in both age groups decreased every year from 2013 to 2019. While the number of unemployed people aged over 25 continued to decrease in 2020, to a figure of approximately 93,000, unemployment for those aged between 15 and 24 increased slightly to just over 39,000.

For further information on the unemployment levels for different age groups, please see the Labour Force Survey results and associated PxStat tables. Further information on youth unemployment can also be found in Indicator 14 below.

Source publication: Institutional Sector Accounts Non-Financial and Financial 2020

Get the data: PxStat IFI03

This indicator measures the year-on-year change in the sum of all liabilities of the financial sector. Figure 2.27 shows that this indicator only breached the MIP threshold of 16.5% in the year 2014. The generally positive year-on-year growth in total financial sector liabilities over the period 2011-2020 has been heavily influenced by the expansion of the investment funds sector in Ireland. While there was a contraction in this indicator in 2011 and 2012, the investment funds sector has expanded every year since 2011, as can be seen in Figure 2.28. For more information on the financial sector see The Financial Sector in Ireland's National Accounts 2018.

Supplementary analysis: 

Get the Data: Eurostat database

The activity rate (also known as the participation rate) is the percentage of the population aged 15-64 years in the labour force as a proportion of the total population of the same age. This indicator is measured as a three-year percentage point change. This indicator breached its threshold of -0.2 percentage points during the years 2011 and 2012. Between 2013 and 2019, the three-year percentage point change in the activity rate was consistently positive, indicating increasing labour force participation. In 2020, the activity rate indicator value was -0.8%, breaching the threshold the first time in eight years. It is worth noting that the negative indicator value in 2020 is driven by the labour force increasing at a slower rate than the general population. Further detail on changes in numbers of labour force participants is shown in Figure 2.31 below.

Get the data: Eurostat database

Figure 2.30 shows the change in Ireland’s activity rate compared with selected EU countries. From 2011 to 2012, and again 2020, the change in Ireland’s activity rate breached the MIP threshold of -0.2 percentage points. While Germany and the Netherlands did not breach the MIP threshold at any time during the ten-year period, Greece breached the threshold in 2013 and 2020, and France breached the threshold in 2020.

Get the data: Eurostat database

Compared to Germany and the Netherlands, two of the country’s largest European trading partners, Ireland has consistently had a relatively low activity rate. Ireland's activity rate has been higher than that of France and Greece and lower than that of Spain over the entire period 2011-2020, although the gap between Ireland and Spain has narrowed in recent years.

Indicator 13: Long-term Unemployment Rate

Source publication: Labour Force Survey Q2 2021

Get the data: PxStat QLF04 (Duration of Unemployment), Eurostat database

The long-term unemployment rate expresses the number of people aged 15 to 74 unemployed for over one year as a percentage of the active population of the same age. The MIP threshold for the three-year percentage point change of the long-term unemployment rate is 0.5%. From 2011 to 2013, Ireland’s long-term unemployment rate indicator increased at rates above the 0.5% threshold. However, since 2014, long-term unemployment as a three-year percentage point change has shown a decrease every year.

Supplementary analysis:

Source publication: Labour Force Survey Q2 2021

Get the data: PxStat QLF04 (Duration of Unemployment), Eurostat database, PxStat QLF06 (Persons in Labour Force)

In 2020, Ireland had the 12th lowest long-term unemployment rate in the EU (Figure 2.35).

Source publication: Labour Force Survey Q2 2021

Get the data: PxStat QLF04 (Duration of Unemployment), Eurostat database, PxStat QLF06 (Persons in Labour Force)

Since 2011, Ireland’s long-term unemployment rate has been higher than two of its major trading partners (Germany and the Netherlands) but this gap has narrowed in recent years.

Indicator 14: Youth Unemployment

Source publication: Labour Force Survey Q2 2021

Get the data: PxStat QLF18 (ILO Participation, Employment and Unemployment Characteristics by Age Group)

The youth unemployment rate is the unemployment rate of people aged 15-24 as a percentage of the labour force of the same age. This indicator is expressed as a three-year change in percentage points. The MIP threshold for youth unemployment is a 2-percentage point increase over three years. Ireland’s youth unemployment increased at a rate exceeding this threshold between 2011 and 2012, with the highest increase of 16.1% seen in 2011. Substantial reduction in youth unemployment can be seen since 2013. In 2020, Ireland's youth unemployment indicator was 1.4%, the first positive figure in eight years. 

Supplementary analysis:

Get the data: PxStat QLF18

Classifying the change in youth unemployment by age, Figure 2.38 shows that the change in youth unemployment is mainly driven by those aged from 20 to 24.

Get the data: Eurostat database

Figure 2.39 shows Ireland’s youth unemployment rate compared to its EU neighbours for 2020. Ireland's youth unemployment rate sits mid-table, 13th lowest, in 2020.

Get the data: Eurostat database

Figure 2.40 shows the youth unemployment rate for the period 2011-2020. This is the number of 15-24 year olds unemployed expressed as percentage of the labour force (also known as active population) of the same age. Since 2011, Ireland’s youth unemployment rate has been relatively high when compared to the Netherlands and Germany, but remains significantly lower than that of Spain and Greece.