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This chapter contains information on Ireland's transactions and positions with the rest of the world. The results shown are consistent with the new methodological standards implemented in June 2014, namely the IMF's Balance of Payments and International Investment Position Manual, sixth edition (BPM6). The Balance of Payments data (tables 16.1, 16.2 and 16.3) show transactions between residents of Ireland and non-residents. Table 16.4 shows the end of year stocks (or levels) of Ireland's financial assets and liabilities, the International Investment Position. The data in table 16.5 shows the outstanding amount of credit granted by credit institutions resident in Ireland to Irish private sector residents, although loans granted by non-resident credit institutions to Irish residents are not included. Table 16.6 combines data from the financial and non-financial sector accounts and shows the trend in saving and investment for households.
| Table 16.1 Balance of International Payments – Current and Capital Accounts | |||||
| €m | |||||
| Item | 2016 | 2017 | |||
| Exports | Imports | Exports | Imports | ||
| Current account | |||||
| Merchandise | 193,160 | 87,072 | 192,854 | 85,214 | |
| of which: | |||||
| Merchanting (net export) | 6,341 | - | 7,593 | - | |
| Services | 135,076 | 198,809 | 159,701 | 178,054 | |
| Repairs and processing | 2,527 | 3,904 | 2,254 | 4,855 | |
| Transport | 7,225 | 2,689 | 8,086 | 2,540 | |
| Tourism and travel | 4,685 | 5,623 | 4,972 | 5,814 | |
| Insurance | 9,296 | 6,695 | 9,913 | 7,079 | |
| Financial services | 13,287 | 11,549 | 15,309 | 13,246 | |
| Royalties/licences | 8,052 | 69,202 | 9,608 | 66,588 | |
| Communications | 719 | 1,165 | 617 | 1,145 | |
| Computer services | 58,079 | 1,385 | 69,323 | 3,353 | |
| Business services | 30,093 | 96,081 | 37,075 | 72,868 | |
| Research and development | 3,978 | 58,052 | 4,907 | 26,832 | |
| Operational leasing | 13,169 | 1,074 | 13,105 | 696 | |
| Misc. business services | 12,946 | 36,955 | 19,062 | 45,340 | |
| Other services n.e.s. | 1,113 | 517 | 2,546 | 564 | |
| Primary income | 70,346 | 120,260 | 78,224 | 137,996 | |
| Compensation of employees | 520 | 627 | 528 | 645 | |
| Investment income | 68,346 | 119,322 | 76,189 | 137,035 | |
| Direct investment income | 18,383 | 61,056 | 20,728 | 72,048 | |
| Income on equity | 15,193 | 55,285 | 18,079 | 65,966 | |
| Dividends & distributed branch profits | 3,420 | 18,603 | 630 | 12,936 | |
| Reinvested earnings | 11,774 | 36,682 | 17,450 | 53,029 | |
| Income on debt | 3,190 | 5,771 | 2,649 | 6,084 | |
| Portfolio investment income | 40,784 | 48,036 | 45,557 | 54,714 | |
| Income on equity | 12,834 | 40,541 | 14,619 | 48,043 | |
| Income on debt | 27,948 | 7,494 | 30,939 | 6,672 | |
| Other investment income | 9,177 | 10,231 | 9,904 | 10,272 | |
| Other primary income | 1,480 | 310 | 1,504 | 317 | |
| Secondary income | 4,504 | 8,317 | 5,154 | 9,744 | |
| Current account - total | 403,086 | 414,458 | 435,934 | 411,009 | |
| Current account balance | -11,373 | 24,924 | |||
| Capital account balance | -4,331 | -28,168 | |||
| Memorandum item: Government income | 74 | 3,909 | 93 | 3,675 | |
| Source: CSO | |||||
Table 16.1 shows the Current and Capital accounts from the Balance of Payments release. The current account is subdivided into three main sections; Merchandise, Services and Income.
In 2017 the current account, a measure of Ireland’s economic flows with the rest of the world, had a surplus of €24.9bn. This was mainly due to a Merchandise surplus of €107.6bn which was offset by profit and interest outflows of €64.4bn and a services deficit of €18.4bn.
The largest categories of services exports were computer services (€69.3bn) and business services (€37.1bn), while the largest categories of service imports were business services (€72.9bn) and royalties (€66.6bn).
Interactive table: StatBank link
Table 16.2 shows the exports of merchandise and services by partner country in 2017.
In 2017, total exports of merchandise and services amounted to €352.6bn. The top 5 countries accounted for 52.6% of exports. The largest trading partner for exports was United States (€60.4bn) followed by United Kingdom with exports of €49.7bn, Germany €27.1bn, China €25.4bn and Belgium €22.9bn.
Interactive table: StatBank link
Table 16.3 shows the imports of merchandise and services by partner country in 2017.
In 2017, total imports of merchandise and services amounted to €263.3bn. The top three countries accounted for 48% of imports. The largest trading partner for imports was United States (€61bn); imports from United Kingdom were €39.5bn and from Netherlands were €25.7bn.
Interactive table: StatBank link
| 16.4 International Investment Position - detailed data €million | ||||||
| Item | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
| Foreign assets | ||||||
| Direct Investment Abroad | 312,304 | 387,758 | 509,706 | 835,530 | 812,639 | 717,133 |
| Equity capital and reinvested earnings | 269,818 | 340,246 | 437,273 | 749,944 | 745,116 | 645,662 |
| Other capital | 42,487 | 47,512 | 72,432 | 85,586 | 67,523 | 71,471 |
| Portfolio Investment | 1,586,856 | 1,685,634 | 2,011,569 | 2,246,763 | 2,442,775 | 2,698,591 |
| Equity | 500,575 | 614,954 | 772,568 | 879,460 | 952,792 | 1,110,022 |
| Debt instruments | 1,086,281 | 1,070,680 | 1,239,000 | 1,367,303 | 1,489,983 | 1,588,569 |
| Bonds and notes | 786,409 | 783,125 | 840,176 | 934,516 | 1,049,890 | 1,138,977 |
| Money market instruments | 299,872 | 287,555 | 398,824 | 432,787 | 440,092 | 449,593 |
| Other Investment | 915,612 | 889,565 | 1,183,108 | 1,283,707 | 1,234,539 | 1,207,098 |
| Loans, currency and deposits | 758,019 | 708,189 | 757,735 | 862,959 | 844,200 | 885,020 |
| Trade Credits | 39,949 | 38,944 | 46,422 | 49,921 | 51,647 | 49,874 |
| Other assets | 117,644 | 142,432 | 378,951 | 370,827 | 338,692 | 272,206 |
| Reserve assets | 1,294 | 1,178 | 1,426 | 2,013 | 3,384 | 3,672 |
| Monetary gold | 244 | 159 | 180 | 178 | 201 | 198 |
| Special drawing rights | 748 | 727 | 776 | 829 | 817 | 776 |
| Reserve Position in the IMF | 301 | 289 | 308 | 329 | 1,029 | 959 |
| Foreign Exchange | 1 | 3 | 3 | 3 | 379 | 597 |
| Other | 0 | 0 | 159 | 674 | 958 | 1,142 |
| Total Foreign Assets | 2,816,067 | 2,964,135 | 3,705,808 | 4,368,013 | 4,493,337 | 4,626,494 |
| Foreign liabilities | ||||||
| Direct Investment in Ireland | 290,438 | 300,733 | 354,045 | 817,580 | 797,521 | 744,386 |
| Equity capital and reinvested earnings | 292,624 | 312,489 | 379,597 | 598,350 | 706,277 | 672,193 |
| Other capital | -2,186 | -11,756 | -25,552 | 219,230 | 91,244 | 72,193 |
| Portfolio Investment | 1,917,029 | 1,933,656 | 2,364,508 | 2,798,428 | 2,909,500 | 3,125,105 |
| Equity | 1,342,789 | 1,517,616 | 1,937,051 | 2,313,180 | 2,450,073 | 2,704,594 |
| Debt instruments | 574,240 | 416,040 | 427,457 | 485,248 | 459,428 | 420,511 |
| Bonds and notes | 552,343 | 405,165 | 413,568 | 466,421 | 445,071 | 403,027 |
| Money market instruments | 21,897 | 10,875 | 13,889 | 18,827 | 14,357 | 17,484 |
| Other Investment | 849,093 | 968,777 | 1,307,346 | 1,272,675 | 1,251,886 | 1,195,452 |
| Loans, currency and deposits | 612,617 | 659,028 | 713,243 | 692,977 | 713,055 | 714,399 |
| Trade Credits | 16,429 | 14,342 | 19,849 | 30,497 | 41,013 | 46,132 |
| Other liabilities | 220,046 | 295,407 | 574,254 | 549,201 | 497,819 | 434,921 |
| Total Foreign Liabilities | 3,056,560 | 3,203,165 | 4,025,899 | 4,888,683 | 4,958,908 | 5,064,943 |
| Source: CSO | ||||||
Table 16.4 shows the International Investment Position.
At the end of 2017, Ireland’s stock of financial assets amounted to €4,626.5bn. The corresponding stock of financial liabilities was €5,064.9bn. This resulted in a net foreign liability of €438.4bn.
Interactive table: Statbank link
| Table 16.5 Irish Private Sector Credit and Deposits, end of year 2012-2017 | ||||||
| €m | ||||||
| 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
| Credit advanced to Irish private sector | 302,164 | 278,266 | 226,881 | 199,877 | 185,771 | 179,144 |
| 1. Households | 111,076 | 107,660 | 96,873 | 91,963 | 88,169 | 89,909 |
| 1.1 Loans for house purchase | 84,973 | 83,322 | 78,292 | 77,029 | 73,469 | 74,799 |
| 1.2 Consumer credit | 14,206 | 12,933 | 11,524 | 11,234 | 12,093 | 12,896 |
| 1.3 Other loans | 11,897 | 11,405 | 7,057 | 3,700 | 2,607 | 2,214 |
| 2. Non-financial corporations | 84,330 | 79,648 | 60,549 | 47,099 | 42,587 | 41,526 |
| 2.1 Loans | 84,204 | 79,526 | 60,292 | 46,819 | 42,346 | 41,254 |
| 2.2 Securities | 126 | 122 | 257 | 280 | 241 | 271 |
| 3. Insurance corporations and pension funds/other financial intermediaries | 106,758 | 90,958 | 69,463 | 60,815 | 55,015 | 47,709 |
| 3.1 Loans | 38,907 | 30,738 | 21,128 | 18,506 | 17,002 | 17,242 |
| 3.2 Securities | 67,851 | 60,220 | 48,335 | 42,309 | 38,013 | 30,466 |
| Deposits of Irish private sector | 166,474 | 180,358 | 165,820 | 176,071 | 180,115 | 187,204 |
| 4. Households | 92,391 | 91,182 | 91,443 | 94,741 | 97,128 | 99,493 |
| 5. Non-financial corporations | 30,888 | 33,933 | 39,803 | 42,652 | 45,579 | 50,533 |
| 6. Insurance corporations and pension funds/Other financial intermediaries | 43,195 | 55,243 | 34,574 | 38,678 | 37,408 | 37,178 |
| Source: Central Bank of Ireland | ||||||
Table 16.5 shows the outstanding amount of credit extended by credit institutions resident in Ireland to Irish private sector residents. It is important to note that the loans granted by non-resident credit institutions to Irish residents are not included in these tables. Hence, if a bank changes its jurisdiction this will affect the amounts shown in this table.
After a continuing decline from 2012 to 2016, the amount owed by households to Irish banks showed a slight increase in 2017 standing at €89.9bn at year end. There is a persisting trend in recent years where households’ credit liabilities have fallen in cumulative terms by €21.2bn since 2012. Loans for house purchase increased by 1.8% in 2017 over the previous year, while deposits held by households rose by 2.4% from 2016 to 2017.
| GFCF | Net Capital Transfers | Deposits | Loans | Insurance, Pensions and Shares | Gross Savings | |
| 2006 | 25.8848637122057 | -0.00559195034151738 | 11.6135284757773 | -28.1948578314225 | 3.43678946271816 | 6.49869655210227 |
| 2007 | 23.1872239453269 | -0.026059763646879 | 6.59681464185655 | -24.8976754679995 | 2.01016650360892 | 5.76806004808496 |
| 2008 | 17.2323486273889 | 0.180449575896915 | 3.74163719423445 | -7.54304539460321 | 0.0200051503926479 | 9.51189040112999 |
| 2009 | 8.85769105741418 | 0.349763583588133 | 5.2614202250906 | 2.01366476523815 | -3.26217610340262 | 11.9733654853287 |
| 2010 | 6.1813935202661 | 0.320971599257239 | 0.548180396929281 | 9.8183523861205 | -6.26719592004236 | 9.38265832332107 |
| 2011 | 5.24210186296655 | 0.172531628037581 | -1.72683745760774 | 8.85124592294578 | -1.03376556243598 | 6.92278761703209 |
| 2012 | 4.9499050017271 | 0.176311315768387 | 0.989173525613431 | 7.46683756324456 | -5.80385825630708 | 9.54543419139877 |
| 2013 | 5.11882989481367 | 0.169984271758472 | 0.203158550900019 | 4.641782604865 | -0.856361694106137 | 8.1064639364722 |
| 2014 | 6.11590604221722 | 0.131821563932359 | 2.59930788313175 | 5.595461329335 | -3.20558772157692 | 6.58400886240596 |
| 2015 | 6.93322397410534 | 0.190961384684007 | 3.94492343711328 | 6.51943952433747 | -9.82362123799105 | 6.37456042408783 |
| 2016 | 8.04530763336597 | 0.230136228942 | 3.21561627922974 | 2.72104202760058 | -3.79598550249127 | 6.47215010703015 |
Interactive link: StatBank table
Household saving peaked at €12bn in 2009 and amounted to €6.5bn in 2016. How households have been using their savings is illustrated in Figure 16.5. The line graph is the trend in actual gross household saving while the bar chart illustrates transactions in investment and borrowing by households.
During the entire period there is a clear link between transactions in loans and transactions in gross fixed capital formation (GFCF) of households. The transactions in loans relate predominantly to borrowing to fund investment in property while the capital formation relates to the property investments themselves.
Since 2009 households have not been borrowing, in net terms. At the same time investment in property has fallen to levels that can be financed by the saving of the sector without having recourse to borrowing. In fact the gross capital formation of households fell from a high of €25.9bn in 2006 to €4.9bn in 2012, ultimately rising to €8bn in 2016. Repayment of loans amounting to €2.7bn, also known as deleveraging, continued to be a major use of household saving in 2016. The use of household saving to fund transactions in investment assets such as deposits and insurance and pensions is also apparent in the graph.
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