Balance of International Payments Quarter

Transcription

1 20 July 2000 Q Chart1: Current Account Balances Q Q Q Q Q Q Q Published by the Central Statistics Office, Ireland. Ardee Road Dublin 6 Ireland LoCall: Skehard Road Cork Ireland 00's million Q Tel: Tel: Fax: Fax: Both offices may be contacted through any of these telephone numbers. CSO on the Web: Director General: Donal Murphy Enquiries: BOP Statistics BOP Section, ext 4047 bop@cso.ie Queries and Sales Information Section, ext 5032 information@cso.ie Diskette Service Databank, ext 5301/5499 databank@cso.ie Balance of International Payments Quarter Merchandise Balance Invisibles Balance Current Account Balance Q ,465-4, Q ,861-3, Year ,903-17, Small Current Account surplus of 78 m in the first quarter of 2000 There was a surplus of 78 m ( 98 m) on the current account of the Balance of Payments in the first quarter of This compares to a marginal deficit of 15 m ( 19 m) in the same period in see Table 1. Combined surpluses for merchandise ( 4,465 m) and current transfers ( 268 m) were almost entirely offset by deficits on services and income of 2,066 m and 2,589 m respectively. Further details on the components are given below. Merchandise trade growth continues (see Tables 1 and 2). The merchandise trade balance of 4,465 m in the first quarter of this year was about 600 m higher than that in the same quarter last year. Over the same period, exports rose from 11,122 m to 13,993 m while imports increased from 7,261 m to 9,528 m. Revised results for 1998 and 1999 The 1998 and 1999 current account data published on 12 May 2000 have been revised following a recalculation of IFSC non-life insurance company flows and the inclusion of more recent information on merchandise, services and income flows. The impact of the changes in the treatment of insurance 1 has been to reduce the original current account surplus for 1998 by about 300 m and to increase the corresponding 1999 surplus by about the same amount. A notable feature of the latest treatment is that the current transfer credit must equal the current transfer debit in relation to non-life insurance activity of resident insurers see Table 3 regarding IFSC current transfers and also the Background Notes. When these changes are combined with those resulting from later information on other flows, the 1998 current account surplus is now put at 556 m ( 706 m) and the 1999 surplus at 446 m ( 567 m). For more information contact John Fitzpatrick at ext or Michael Connolly at ext Central Statistics Office The contents of this release may be quoted provided the source is given clearly and accurately. Reproduction for own or internal use is permitted. Ref 123/2000 ISSN

2 Transport Chart2: Transactions in services, Q Tourism & Travel Insurance Credit Financial Computer Debit Royalties Business IR m 2,000 1,800 1,600 1,400 1,200 1, IFSC contribution to the current account (see Table 3) In terms of their nominal contribution to the overall current account balance, IFSC enterprises transactions with non-residents showed a surplus of 349 m in the first quarter of this year. However, IFSC enterprises also interact with their resident non-ifsc affiliates, some of which are foreign owned. Care should therefore be exercised when interpreting the IFSC s contribution to the current account in an overall national context. Geographical details of the current account (see Table 4a) Credit transactions with EU residents in the first quarter accounted for 13,981 m or 63% of the total of current account credits; the corresponding debits amounted to 11,384 m or almost 52% of the total. The same analysis for transactions with EMU residents shows that total credits amounted to 7,688 m or almost 35% of the total; EMU debit transactions totalled to 5,420 m or almost a quarter of all current account debits. Services balance virtually unchanged (see Tables 1 and 2) In the first quarter of this year, services exports amounted to 2,529 m with imports at 4,595 m; the corresponding flows for the same quarter in 1999 were 2,225 m and 4,269 m. The balance in both quarters was therefore virtually unchanged. The most notable feature within services is the increase in exports of computer services from 749 m to 1,052 m between the two quarters. Chart3: Investment income, credit, Q Other investment income 64% Direct investment income 15% Portfolio investment income 21% Income outflows continue to increase (see Tables 1 and 2) Net outflows of income amounted to 2,589 m in the first quarter of this year compared to 2,056 m in the first quarter of This reflects gross inflows of 4,751 m and 3,828 m respectively; corresponding gross outflows were 7,340 m and 5,884 m. Portfolio investment income outflows largely accounted for the increased income deficit. Current transfers continue in surplus (see Tables 1 and 3) Current transfers showed a net surplus of 268 m in the first quarter of 2000 compared to one of 224 m in the same period last year. The corresponding gross flows were credits of 882 m and 749 m and debits of 614 m and 525 m. It should be noted that within these gross flows transfers relating to IFSC non-life insurance business showed equal amounts on both the credit and debit sides i.e. 324 m in the latest quarter and 263 m in the first quarter of Non-IFSC transfers relate to EU receipts and payments. Capital account (see Table 1) Increased EU capital transfer receipts largely accounted for the net balance of 237 m shown for the first quarter of 2000, the corresponding figure for the same quarter last year being 105 m. IFSC transactions dominate the financial account (see Tables 1, 2 and 3) The first quarter balance of 1,095 m represents an increase in Ireland s net liabilities to non-residents. This results from transactions in foreign assets of 31,617 m being more than offset by the transactions in liabilities of 32,712 m. On the assets side, IFSC enterprises accounted for 27,834 m or 88% of the total; on the liabilities side these enterprises accounted for 26,075 m or almost 80% of the total. Chart4: Investment income, debit, Q Other investment income 24% Portfolio investment income 21% Direct investment income 55% Geographical analysis of the financial account (see Table 4b) Transactions in foreign assets with EU residents amounted to 17,449 m or 55% of the total; the corresponding liability transactions accounted for 20,426 m or 62% of all such transactions with non-residents. Assets transactions with EMU residents were valued at 9,491 m or 30% of the total while liability transactions at 5,178 m were almost 16% of all such transactions. Direct investment Inward direct investment (including reinvestment of earnings) at 2,707 m was over 1.8 billion lower than that for the same quarter in Outward direct investment of 322 m was also lower (by over 0.5 billion) on the figure shown for the first quarter of last year. Net inward direct investment in the quarter was, therefore, 2,385 m. Portfolio investment Inward portfolio investment transactions of 19,053 m were well over double the first quarter 1999 value of 7,711 m. Equity and debt instruments contributed to this increase. Outward portfolio investment of 23,512 m was just over double its value in the same period last year. Again, transactions in both equity and debt 2

3 Chart5: Direct investment inward ('In Ireland'), outward ('Abroad'), Q Equity Reinvested Earnings Abroad In Ireland Other Capital 2,000 1,500 1, IR m ,000 instruments showed increases. IFSC transactions in foreign assets and liabilities dominated portfolio investment activity. Overall, net outward investment amounted to 4,459 m in the first quarter of the year. Other investment Ireland s other investment transactions in the first quarter showed an increase in net liabilities of 3,139 m. This resulted from assets transactions of 7,813 m (which showed little change compared to the same quarter last year) being exceeded by liability transactions of 10,952 m (over 2.5 billion higher than that for the first quarter of 1999). IFSC activity resulted in increases for both assets and liabilities over the two quarters being compared and was in contrast to non-ifsc activity which resulted in reductions on both sides. Reserve assets There was a marginal reduction ( 30 m) from transactions in reserve assets in the first quarter of the year. Net errors and omissions The balancing item net errors and omissions shows a debit of 1,410 m for the first quarter. Chart6: Portfolio investment assets/liabilities, Q Equity Bonds and notes Money market instruments Assets Liabilities IR m 15,000 10,000 5, ,000-10,000-15,000 Retrospective estimates for the current account The National Income and Expenditure Release being published today includes some provisional pre-1998 retrospective estimates for the main components of the current account of the balance of payments. These estimates have been made on the same methodological basis as the results in this (balance of payments) Release. It is intended to refine these estimates at a later stage. 1 In the case of insurance, the treatment recommended by the International Monetary Fund was followed initially but was re-examined in consultation with the Fund. A more rigorous approach has now been adopted. This takes greater account of the effect of supplementary premiums and of the change in the actuarial element of insurance technical reserves in calculating insurance services, income flows and current transfers. 3

4 Table 1a Summary of Current, Capital and Financial Account Net Balances Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Current Account Merchandise 2 13,996 17,903 3,021 3,261 3,934 3,780 3,861 4,304 4,914 4,824 4,465 Services -7,089-8,424-1,744-1,475-1,552-2,319-2,044-2,095-2,002-2,283-2,066 Income -7,389-9,984-1,631-1,905-2,125-1,729-2,056-2,380-2,968-2,579-2,589 Current Transfers 1, Balance on Current Account Balance on Capital Account Financial Account Direct Investment 3,483 10,008 1,179 1,547 1,885-1,128 3,686 1,992 3, ,385 Portfolio Investment -6,667-11, ,024-4, ,725-4,057-3, ,459 Other Investment 3 5, , , , ,139 Reserve Assets -1,796 1, , Balance on Financial Account , ,207 2,042-3, ,338 1,095 Net errors and omissions -2,112-1,008-1, , ,132 3, ,918-1,410 1 Revised 2 Adjusted for balance of payments purposes 3 Including financial derivatives and trade credits

5 Table 1b Summary of Current, Capital and Financial Account Net Balances (in Euro Currency) million¹ Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Current Account Merchandise 3 17,771 22,732 3,835 4,141 4,996 4,800 4,903 5,465 6,240 6,125 5,671 Services -9,002-10,697-2,214-1,872-1,970-2,945-2,596-2,661-2,542-2,898-2,625 Income -9,382-12,677-2,071-2,418-2,698-2,195-2,611-3,022-3,769-3,275-3,286 Current Transfers 1,319 1, Balance on Current Account Balance on Capital Account Financial Account Direct Investment 4,422 12,707 1,497 1,965 2,393-1,433 4,680 2,529 4,332 1,167 3,027 Portfolio Investment -8,466-14,042-1,255-1,301-5, ,730-5,152-4, ,659 Other Investment 4 7, , ,245 1, , ,986 Reserve Assets -2,280 1, , , Balance on Financial Account 1, , ,533 2,593-4, ,698 1,393 Net errors and omissions -2,681-1,280-1, ,792 1,078-2,707 3, ,436-1,791 1 Converted at the European Union official exchange rate conversion factor, fixed at , effective from 1 January Revised 3 Adjusted for balance of payments purposes 4 Including financial derivatives and trade credits

6 Table 2a Current and Capital Accounts Quarter 1 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Current Account Cr Db Cr Db Cr Db Cr Db Cr Db Cr Db Merchandise 2 13,993 9,528 11,122 7,261 11,931 7,627 12,757 7,843 13,770 8,946 49,579 31,676 Services 2,529 4,595 2,225 4,269 2,813 4,908 2,875 4,877 2,965 5,248 10,877 19,302 Transport ,019 1,761 Tourism and Travel ,898 1,829 Communications Insurance ,050 Financial services , Computer services 4 1, , , Royalties/Licences 56 1, , , , , ,134 Business services 220 1, , , , ,227 1,520 8,125 Merchanting/Trade , ,498 Operational leasing Misc. business services , , , , , ,557 Other services n.e.s

7 Table 2a Current and Capital Accounts - continued Quarter 1 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Current Account - continued Cr Db Cr Db Cr Db Cr Db Cr Db Cr Db Income 4,751 7,340 3,828 5,884 4,705 7,086 4,729 7,697 5,255 7,834 18,517 28,501 Compensation of Employees Investment Income 4,711 7,307 3,787 5,860 4,665 7,071 4,688 7,675 5,214 7,806 18,354 28,411 Direct investment income 713 4, , , , ,468 2,550 16,584 Income on equity 471 3, , , , ,296 1,513 15,988 Dividends & distributed branch profits 87 2, , , , , ,221 Reinvested earnings 384 1, , , ,465 5,767 Income on debt , Portfolio investment income 984 1, ,054 1,160 1,244 1,183 1,372 1,298 1,127 4,527 4,797 Income on equity ,018 2,530 Income on debt , ,509 2,266 Other investment income 3,014 1,736 2,336 1,257 2,885 1,868 2,861 1,694 3,196 2,212 11,277 7,030 Current Transfers ,649 1,332 3,947 2,996 Current Account - Totals 22,155 22,077 17,924 17,939 20,206 20,102 21,153 21,074 23,639 23,360 82,921 82,475 Current Account Balance Capital Account Balance Revised 2 Adjusted for balance of payments purposes 3 Excluding passenger fare receipts 4 Covers exports and imports of software that was not incorporated as part of computer hardware or physical media but separately transmitted by electronic means. The value of sales and purchases of additional software licences is also included 5 Covers mainly inter-affiliate charges (e.g. management fees), in particular on the debit side

8 Table 2a Current and Capital Accounts - continued Quarter Quarter 2 Quarter 3 Quarter 4 Year Current Account Cr Db Cr Db Cr Db Cr Db Cr Db Merchandise 2 10,324 7,303 10,599 7,338 10,840 6,906 11,587 7,807 43,351 29,355 Services 1,885 3,628 2,316 3,791 2,742 4,294 2,291 4,610 9,234 16,323 Transport ,638 Tourism and Travel ,820 1,666 Communications Insurance Financial services Computer services , Royalties/Licences , , ,364 Business services 280 1, , , ,929 1,486 6,630 Merchanting/Trade ,265 Operational leasing Misc. business services , ,148 1,054 4,298 Other services n.e.s

9 Table 2a Current and Capital Accounts - continued Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Current Account - continued Cr Db Cr Db Cr Db Cr Db Cr Db Income 3,258 4,889 3,508 5,413 3,771 5,896 3,504 5,233 14,042 21,431 Compensation of Employees Investment Income 3,220 4,866 3,471 5,385 3,734 5,873 3,467 5,215 13,892 21,338 Direct investment income 486 2, , , ,850 2,001 12,190 Income on equity 302 2, , , ,740 1,294 11,683 Dividends & distributed branch profits 25 1, , , , ,220 Reinvested earnings 277 1, , , ,202 3,463 Income on debt Portfolio investment income ,844 3,524 Income on equity ,774 Income on debt ,052 1,750 Other investment income 1,955 1,178 2,285 1,455 2,514 1,607 2,292 1,384 9,046 5,625 Current Transfers , ,091 3,053 Current Account - Totals 16,437 16,587 17,407 17,208 18,240 17,797 18,634 18,569 70,717 70,161 Current Account Balance Capital Account Balance Revised 2 Adjusted for balance of payments purposes 3 Excluding passenger fare receipts 4 Covers exports and imports of software that was not incorporated as part of computer hardware or physical media but separately transmitted by electronic means. The value of sales and purchases of additional software licences is also included 5 Covers mainly inter-affiliate charges (e.g. management fees), in particular on the debit side

10 Table 2b Financial Account¹ Quarter 1 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Direct Investment , , ,936-1,250 4, ,847-4,005 14,013 Equity , , , ,676-1,735 6,209 Reinvested Earnings , , , ,465 5,767 Other Capital , , ,037 Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Portfolio Investment -23,512 19,053-11,436 7,711-16,787 12,730-14,707 11,309-18,275 18,397-61,205 50,146 Equity -6,299 13,317-3,939 4,636-7,185 9,964-9,546 10,846-6,232 13,375-26,903 38,820 Debt Instruments -17,213 5,736-7,497 3,075-9,602 2,766-5, ,043 5,022-34,302 11,326 Bonds and notes -10,838 2,625-7,079 1,205-7,423 1,715-4,105 1,765-4,705 1,019-23,313 5,705 Money market instruments -6,375 3, ,870-2,178 1,050-1,056-1,302-7,337 4,003-10,989 5,621 Other Investment -7,813 10,952-7,787 8,382-5,332 4,210-11,677 11,655-2,721 3,066-27,517 27,314 Loans, currency and deposits -7,586 10,616-5,430 8,384-5,018 3,719-10,632 10,704-3,597 3,243-24,676 26,049 Other , , ,841 1,264

11 Table 2b Financial Account 1 - continued Quarter 1 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Reserve Assets 30-1, ,375 - Monetary gold Special drawing rights Reserve position in the IMF Foreign exchange 33-1, ,120 - Other Balance on Financial Account 1,095 2,042-3, , Net errors and omissions -1,410-2,132 3, ,918-1,008 Memorandum : Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Government financial transactions -1,622 1, , ,188-1, ¹ Financial account transactions are categorised under two headings 'Assets' and 'Liabilities' for Portfolio Investment, Other Investment and Reserve Assets. ForDirect Investment, a 'directional' categorisation is used: 'Abroad' indicates direct investment by Irish investors in foreign companies; direct investment into Ireland is indicated by the heading 'In Ireland'. The sign convention used is: a minus sign in the 'Abroad' and 'Assets' columns means investments or acquisitions abroad (in enterprises, foreign securities, foreign deposits, etc.) by Irish investors exceeded their disinvestments or disposals in the period, while an entry without sign (less usual) means disinvestment exceeded investment; an entry without sign in the 'In Ireland' and 'Liabilities' columns means that investment transactions into Ireland or incurrences of liabilities to foreign investors exceeded disinvestment or extinctions of liabilities in the period, while a minus sign (less usual) indicates that disinvestment exceeded investment and liability extinctions exceeded incurrences 2 Revised 3 Including financial derivatives and trade credits

12 Table 2b Financial Account¹ - continued Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Direct Investment , , , ,743 6,226 Equity , , , ,615 Reinvested Earnings , , , ,202 3,463 Other Capital ,852 Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Portfolio Investment -9,938 8,950-7,195 6,170-12,145 7,883-7,675 7,283-36,953 30,286 Equity -5,552 7,834-2,957 4,978-2,656 7,645-4,131 6,084-15,296 26,540 Debt Instruments -4,386 1,116-4,238 1,193-9, ,544 1,199-21,657 3,746 Bonds and notes -2, , , ,174 1,434 Money market instruments -1, , , ,025 1,451-7,483 2,312 Other Investment -2,593 4,120-6,403 6,486-6,904 10,247 1, ,204 20,079 Loans, currency and deposits -1,069 3,068-6,918 5,529-6,565 9,587 1, ,711 17,331 Other 3-1,523 1, ,493 2,748

13 Table 2b Financial Account 1 - continued Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Reserve Assets ,796 - Monetary gold Special drawing rights Reserve position in the IMF Foreign exchange ,600 - Other Balance on Financial Account 1, , Net errors and omissions -1, , ,112 Memorandum : Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Government financial transactions ,283 ¹ Financial account transactions are categorised under two headings 'Assets' and 'Liabilities' for Portfolio Investment, Other Investment and Reserve Assets. ForDirect Investment, a 'directional' categorisation is used: 'Abroad' indicates direct investment by Irish investors in foreign companies; direct investment into Ireland is indicated by the heading 'In Ireland'. The sign convention used is: a minus sign in the 'Abroad' and 'Assets' columns means investments or acquisitions abroad (in enterprises, foreign securities, foreign deposits, etc.) by Irish investors exceeded their disinvestments or disposals in the period, while an entry without sign (less usual) means disinvestment exceeded investment; an entry without sign in the 'In Ireland' and 'Liabilities' columns means that investment transactions into Ireland or incurrences of liabilities to foreign investors exceeded disinvestment or extinctions of liabilities in the period, while a minus sign (less usual) indicates that disinvestment exceeded investment and liability extinctions exceeded incurrences 2 Revised 3 Including financial derivatives and trade credits

14 Table3 Current, Capital and Financial Accounts showing IFSC¹ and non IFSC activity Quarter 1 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Cr Db Cr Db Cr Db Cr Db Cr Db Cr Db Current Account - Totals 22,155 22,077 17,924 17,939 20,206 20,102 21,153 21,074 23,639 23,360 82,921 82,475 Merchandise 3 13,993 9,528 11,122 7,261 11,931 7,627 12,757 7,843 13,770 8,946 49,579 31,676 Services 2,529 4,595 2,225 4,269 2,813 4,908 2,875 4,877 2,965 5,248 10,877 19,302 - IFSC ,598 2,146 - non IFSC 1,926 4,167 1,652 3,826 2,103 4,411 2,312 4,287 2,212 4,632 8,279 17,156 Income 4,751 7,340 3,828 5,884 4,705 7,086 4,729 7,697 5,255 7,834 18,517 28,501 - IFSC 3,485 3,311 2,629 2,337 3,562 3,437 3,642 3,524 3,991 3,742 13,823 13,039 - non IFSC 1,266 4,029 1,199 3,547 1,144 3,649 1,087 4,173 1,264 4,092 4,694 15,461 Current Transfers ,649 1,332 3,947 2,996 -IFSC ,031 1,031 2,004 2,004 - non IFSC , Balance on Current Account Balance on Capital Account Financial Account 5 Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Direct investment , , ,936-1,250 4, ,847-4,005 14,013 - IFSC , , , ,230 - non IFSC , ,264-1,250 1, ,005 4,783 Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Portfolio investment -23,512 19,053-11,436 7,711-16,787 12,730-14,707 11,309-18,275 18,397-61,205 50,146 - IFSC -21,143 16,647-8,024 7,063-14,645 12,721-13,154 10,798-16,970 16,634-52,792 47,216 - non IFSC -2,369 2,406-3, , , ,305 1,762-8,413 2,931 Other investment 6-7,813 10,952-7,787 8,382-5,332 4,210-11,677 11,655-2,721 3,066-27,517 27,314 - IFSC -6,691 8,500-4,066 3,330-5,169 4,584-8,180 6,902-2,237 2,640-19,652 17,456 - non IFSC -1,122 2,452-3,721 5, ,498 4, ,865 9,858 Reserve Assets 30-1, ,375 - Balance on Financial Account 1,095 2,042-3, , Net errors and omissions -1,410-2,132 3, ,918-1,008 1 From the start of 2000 new international financial service projects are no longer subject to the earlier certification and licensing procedures in operation for location in the IFSC and such projects can, therefore, locate anywhere in Ireland. Additions to existing IFSC projects, however, are still subject to the formal procedures. For statistical analysis purposes this table still shows the 'IFSC/non-IFSC' breakdown and the activities of all international financial service enterprises are covered under the IFSC heading 2 Revised 3 Adjusted for balance of payments purposes 4 Current transfers to and from IFSC enterprises relate solely to non-life insurance transactions (see Background Notes) 5 See footnote 1 on Table 2b 6 Including financial derivatives and trade credits

15 Table3 Current, Capital and Financial Accounts showing IFSC¹ and non IFSC activity - continued Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Cr Db Cr Db Cr Db Cr Db Cr Db Current Account - Totals 16,437 16,587 17,407 17,208 18,240 17,797 18,634 18,569 70,717 70,161 Merchandise 3 10,324 7,303 10,599 7,338 10,840 6,906 11,587 7,807 43,351 29,355 Services 1,885 3,628 2,316 3,791 2,742 4,294 2,291 4,610 9,234 16,323 - IFSC ,124 1,556 - non IFSC 1,410 3,273 1,768 3,376 2,174 3,898 1,757 4,220 7,110 14,767 Income 3,258 4,889 3,508 5,413 3,771 5,896 3,504 5,233 14,042 21,431 - IFSC 2,324 2,173 2,466 2,324 2,735 2,704 2,578 2,450 10,102 9,651 - non IFSC 934 2,715 1,042 3,089 1,037 3, ,784 3,939 11,780 Current Transfers , ,091 3,053 -IFSC ,983 1,983 - non IFSC ,108 1,070 Balance on Current Account Balance on Capital Account Financial Account 5 Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Direct investment , , , ,743 6,226 - IFSC , , ,412 - non IFSC , , ,743 2,814 Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Portfolio investment -9,938 8,950-7,195 6,170-12,145 7,883-7,675 7,283-36,953 30,286 - IFSC -8,982 9,206-6,124 5,457-11,311 8,042-6,502 6,565-32,919 29,271 - non IFSC , , ,035 1,015 Other investment 6-2,593 4,120-6,403 6,486-6,904 10,247 1, ,204 20,079 - IFSC -4,363 4,132-3,576 3,731-4,862 8, ,469 16,534 - non IFSC 1, ,826 2,755-2,042 2,071 2,363-1, ,545 Reserve Assets ,796 - Balance on Financial Account 1, , Net errors and omissions -1, , ,112 1 From the start of 2000 new international financial service projects are no longer subject to the earlier certification and licensing procedures in operation for location in the IFSC and such projects can, therefore, locate anywhere in Ireland. Additions to existing IFSC projects, however, are still subject to the formal procedures. For statistical analysis purposes this table still shows the 'IFSC/non-IFSC' breakdown and the activities of all international financial service enterprises are covered under the IFSC heading 2 Revised 3 Adjusted for balance of payments purposes 4 Current transfers to and from IFSC enterprises relate solely to non-life insurance transactions (see Background Notes) 5 6 See footnote 1 on Table 2b Including financial derivatives and trade credits

16 Table 4a Current and Capital Accounts showing geographical¹ detail ² Quarter 1 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Cr Db Cr Db Cr Db Cr Db Cr Db Cr Db Current Account - Totals 22,155 22,077 17,924 17,939 20,206 20,102 21,153 21,074 23,639 23,360 82,921 82,475 Merchandise 3 13,993 9,528 11,122 7,261 11,931 7,627 12,757 7,843 13,770 8,946 49,579 31,676 - EMU 5,189 1,990 4,362 1,422 4,823 1,562 4,626 1,480 5,526 1,746 19,337 6,209 - non EMU 8,804 7,538 6,760 5,839 7,107 6,065 8,132 6,363 8,244 7,200 30,243 25,467 - EU 8,926 5,538 7,233 3,907 7,608 4,155 7,633 4,121 8,909 4,940 31,383 17,123 - non EU 5,067 3,990 3,889 3,354 4,323 3,472 5,124 3,722 4,861 4,006 18,196 14,553 Services 2,529 4,595 2,225 4,269 2,813 4,908 2,875 4,877 2,965 5,248 10,877 19,302 - EMU , , ,137 3,619 4,254 - non EMU 1,734 3,686 1,534 3,341 1,881 3,814 1,876 3,782 1,968 4,111 7,258 15,048 - EU 1,660 1,841 1,415 1,889 1,880 2,155 1,897 2,184 2,039 2,278 7,230 8,506 - non EU 869 2, , , , ,969 3,647 10,796 Income 4,751 7,340 3,828 5,884 4,705 7,086 4,729 7,697 5,255 7,834 18,517 28,501 - EMU 1,655 2,484 1,371 1,875 1,548 2,205 1,498 2,556 1,985 2,733 6,402 9,369 - non EMU 3,096 4,856 2,457 4,009 3,158 4,881 3,231 5,141 3,269 5,101 12,115 19,132 - EU 2,628 3,522 2,058 2,872 2,617 3,291 2,603 3,670 2,898 3,992 10,176 13,824 - non EU 2,123 3,818 1,770 3,012 2,089 3,795 2,126 4,027 2,356 3,842 8,340 14,676 Current Transfers ,649 1,332 3,947 2,996 - EMU non EMU ,493 1,186 3,662 2,757 - EU , ,294 2,209 - non EU Balance on Current Account Balance on Capital Account The term EMU means the area represented by the 11 Member States participating in Monetary Union since the introduction of the Euro currency on 1 January The data for 1998 are shown with an EMU/non EMU breakdown for comparison with the 1999 data 2 Revised 3 Adjusted for balance of payments purposes

17 Table 4a Current and Capital Accounts showing geographical¹ detail - continued Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Cr Db Cr Db Cr Db Cr Db Cr Db Current Account - Totals 16,437 16,587 17,407 17,208 18,240 17,797 18,634 18,569 70,717 70,161 Merchandise 3 10,324 7,303 10,599 7,338 10,840 6,906 11,587 7,807 43,351 29,355 - EMU 4,014 1,324 4,779 1,373 4,771 1,299 4,981 1,396 18,544 5,392 - non EMU 6,310 5,979 5,820 5,965 6,069 5,607 6,607 6,412 24,807 23,962 - EU 6,662 3,765 7,412 3,954 7,140 3,723 7,939 4,106 29,154 15,548 - non EU 3,661 3,538 3,187 3,385 3,700 3,183 3,648 3,701 14,197 13,806 Services 1,885 3,628 2,316 3,791 2,742 4,294 2,291 4,610 9,234 16,323 - EMU ,410 2,762 3,846 - non EMU 1,307 2,850 1,682 2,908 2,003 3,519 1,480 3,201 6,472 12,477 - EU 1,235 1,570 1,462 1,689 1,690 1,741 1,603 2,502 5,990 7,502 - non EU 650 2, ,102 1,052 2, ,108 3,244 8,821 Income 3,258 4,889 3,508 5,413 3,771 5,896 3,504 5,233 14,042 21,431 - EMU 923 1, ,557 1,014 1,642 1,189 1,790 4,082 6,412 - non EMU 2,334 3,466 2,552 3,856 2,757 4,254 2,316 3,443 9,960 15,019 - EU 1,895 2,325 1,881 2,455 2,018 2,643 2,166 2,715 7,960 10,138 - non EU 1,362 2,564 1,628 2,958 1,753 3,253 1,338 2,518 6,081 11,293 Current Transfers , ,091 3,053 - EMU non EMU , ,526 2,605 - EU , ,546 2,381 - non EU Balance on Current Account Balance on Capital Account The term EMU means the area represented by the 11 Member States participating in Monetary Union since the introduction of the Euro currency on 1 January The data for 1998 are shown with an EMU/non EMU breakdown for comparison with the 1999 data 2 Revised 3 Adjusted for balance of payments purposes

18 Table 4b Financial Account¹ showing geographical² detail Quarter 1 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Direct Investment , , ,936-1,250 4, ,847-4,005 14,013 - EMU , , ,764 - non EMU , , ,139-1,129 2, ,223-3,527 10,249 - EU , , ,189 4,767 - non EU , , , , ,785-2,817 9,246 Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Portfolio Investment -23,512 19,053-11,436 7,711-16,787 12,730-14,707 11,309-18,275 18,397-61,205 50,146 - EMU -11,957 6,462-3, ,235 2,488-5,203 1,395-5,801 3,393-17,964 8,143 - non EMU -11,555 12,591-7,710 6,844-13,552 10,242-9,504 9,914-12,474 15,004-43,241 42,004 - EU -16,048 17,093-7,803 3,627-7,932 4,789-5, ,044 6,053-23,261 15,087 - non EU -7,464 1,960-3,633 4,084-8,855 7,941-9,226 10,692-16,231 12,343-37,944 35,060 Other Investment 4-7,813 10,952-7,787 8,382-5,332 4,210-11,677 11,655-2,721 3,066-27,517 27,314 - EMU 2, ,603 3,877-2, ,807 1,981-2,900 1,097-11,360 7,795 - non EMU -10,121 11,696-4,184 4,506-3,282 3,370-8,870 9, ,969-16,158 19,518 - EU -1,458 3,607-3,602 4,035-2,478 2,284-7,614 6,396-3,987 2,234-17,681 14,950 - non EU -6,355 7,345-4,185 4,347-2,854 1,926-4,063 5,258 1, ,836 12,364 Reserve Assets 30-1, ,375 - Balance on Financial Account 1,095 2,042-3, , Net errors and omissions -1,410-2,132 3, ,918-1,008 ¹ See footnote 1 on Table 2b ² The term EMU means the area represented by the 11 Member States participating in Monetary Union since the introduction of the Euro currency on 1 January The data for 1998 are shown with an EMU/non EMU breakdown for comparison with the 1999 data 3 Revised 4 Including financial derivatives and trade credits

19 Table 4b Financial Account¹ showing geographical² detail - continued Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Abroad In Ireland Direct Investment , , , ,743 6,226 - EMU non EMU , , , ,376 5,889 - EU , , ,654 - non EU , , ,858 2,572 Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Portfolio Investment -9,938 8,950-7,195 6,170-12,145 7,883-7,675 7,283-36,953 30,286 - EMU -1, ,730 1,038-2, ,187 1,594-7,997 3,796 - non EMU -8,622 8,201-5,465 5,133-9,380 7,467-5,488 5,689-28,956 26,490 - EU -2,714 3,157-3,268 2,770-6,543 1,382-1,051 4,252-13,576 11,561 - non EU -7,224 5,793-3,927 3,400-5,601 6,501-6,625 3,030-23,377 18,725 Other Investment 4-2,593 4,120-6,403 6,486-6,904 10,247 1, ,204 20,079 - EMU -1,096 1,718-5,096 3,926-3,388 4,754 1, ,775 10,508 - non EMU -1,497 2,402-1,307 2,560-3,516 5, ,430 9,571 - EU ,473-5,609 6,463-4,692 7,515 1, ,392 15,760 - non EU -2,093 1, ,212 2, ,812 4,319 Reserve Assets ,796 - Balance on Financial Account 1, , Net errors and omissions -1, , ,112 ¹ See footnote 1 on Table 2b ² The term EMU means the area represented by the 11 Member States participating in Monetary Union since the introduction of the Euro currency on 1 January The data for 1998 are shown with an EMU/non EMU breakdown for comparison with the 1999 data 3 Revised 4 Including financial derivatives and trade credits

20 Central Statistics Office Balance of Payments Background Notes Introduction Ireland s balance of payments (BOP) quarterly statistical compilation system was recently revamped to strengthen sectoral and enterprise coverage in basic data collection, to adopt best international methodological standards, to conform more closely with international presentation formats, and to provide for geographical analysis of the results. The resulting improvements facilitate the production of data required by the European Central Bank (ECB) and the EU Commission (EUROSTAT) to compile balance of payments statistics for the EMU and EU areas. The needs of other international organisations (such as IMF and OECD) as well as those of national users have also been catered for. A description of the methodology is given below. It follows as far as possible the recommendations of the IMF s Balance of Payments Manual - 5 th Edition (BPM5) published in 1993, but with certain modifications approved internationally since then (concerning, for example, the treatment of financial derivatives). The presentation of these new results for 1998 and 1999 essentially completes the programme started some years ago to compile the BOP statistics on the basis of the most up to date international recommendations. Data collection BOP data collection is statutory and surveys or other data collection arrangements are conducted under the Statistics (Balance of Payments) Order, 1996 made under the Statistics Act, A number of new quarterly surveys were introduced in These were directed to financial service enterprises not formerly surveyed, in particular to enterprises operating from the International Financial Services Centre (IFSC) in Dublin. Some of the information now being collected directly from these enterprises was formerly implicitly incorporated from other sources in the published results. In addition to the new surveys existing surveys were redesigned. The financial enterprise surveys cover banking, insurance, asset financing, treasury, institutional investment, activities of mutual funds, unit trusts and similar collective investment operations, broking and other service provision. Respondents are required to make quarterly returns using either paper or electronic media. Exhaustive coverage is aimed at but, in order to reduce reporting burden, companies with low activity volumes may, on approval from the CSO, provide annual data. Overall, about 3,000 entities are surveyed. Manufacturing and non-financial service enterprises have been reporting their BOP transactions to CSO for a number of years. The surveys directed towards these enterprises were re-designed to meet the new conceptual and geographical requirements. Coverage is on a sample selection basis, those surveyed being selected on the basis of statistical register information concerning transactions with non-residents. About 500 companies make quarterly and/or annual returns. The information collected for all types of enterprises covers transactions with non-residents concerning purchases and sales of services, income flows, and acquisitions and disposals of foreign assets or liabilities. Apart from survey data, administrative sources also provide information on non-resident transactions (e.g. the National Treasury Management Agency, on flows associated with Ireland s foreign debt and other transactions; the Department of Defence, concerning Ireland s UN military peace-keeping activity; the Department of Foreign Affairs, on expenditure incurred in maintaining Ireland s embassies and consulates abroad; the Central Bank of Ireland, on reserve assets and other assets/liabilities and associated income flows). In addition, information on merchandise exports and imports and on tourism expenditure and receipts is obtained from other CSO inquiries. 20

21 Central Statistics Office Structure of the Balance of Payments accounts Sign convention and symbols Balance of Payments The balance of payments presentation consists of three tables or accounts, the Current Account, the Capital Account and the Financial Account. The current account consists of trade in merchandise and services, income inflows and outflows and current transfers. The capital account covers capital transfers and the acquisition and disposal of non-produced, non-financial assets. The financial account is concerned with transactions in foreign financial assets and liabilities, distinguishing the functional type of investment i.e. direct, portfolio and other investment and reserve assets. The BOP presentation follows the standard double entry accounting treatment for a transaction i.e. in principle, every credit entry is matched by a corresponding debit entry elsewhere in the system. In the current account, credit items are exports of merchandise and services, income inflows and current transfer receivables while debit items are imports, income outflows and transfer payables. In the capital account, capital transfer receivables are recorded as credits and payables as debits. Both credit (denoted by the symbol Cr ) and debit (denoted by Db ) items are shown as positive numbers and the net balances are calculated as credit debit. The transactions in the financial account are implicitly recorded on a credit/debit basis but are presented on an assets/liabilities basis. Increases in foreign assets or reductions in foreign liabilities are shown with a (minus) sign, i.e. implicitly as a debit amount, while decreases in assets or increases in liabilities are unsigned i.e. shown as positive numbers (credits). The net balances are calculated as net change in assets + net change in liabilities. In the case of direct investment, the asset/liability presentation is replaced by the so-called directional one, i.e. direct investment abroad (which approximates to the assets concept) and direct investment in Ireland (which closely equates to liabilities). The difference between the two approaches centres on the treatment of reverse investment by a direct investment enterprise in its parent (direct investor); these transactions are generally relatively small. Amounts are shown in millions of Irish Pounds and, in Table 1b, in millions of Euro. 0 means amounts of less than 500,000 units of currency; - means not relevant. Cell entries may not add to totals due to rounding. Net errors and omissions Valuation Residence Geographical allocation principle Given the double entry accounting procedure described above, the sum of the credit entries should in principle equal the sum of the debit entries over all three accounts. In practice because of differences in coverage, valuation and timing, this does not occur and a balancing item net errors and omissions is inserted to balance the overall account. BOP transactions, in principle, should be recorded on an accruals basis using market valuation. In practice, the collection system is designed to adhere to this approach and, for the most part, the valuations reported are either market values or a close approximation. In certain cases, income (interest) flows on debt securities are currently reported on a cash basis but accruals reporting is intended ultimately. BOP transactions occur between residents of Ireland and non-residents. The term resident covers (a) individuals, including foreign nationals, living in Ireland for at least one year as well as Irish embassy staff and military staff located abroad, (b) Irish government enclaves located abroad (embassies, consulates, etc.), and (c) corporate bodies who have a centre of economic interest located here, including branches of foreign-registered companies. It is important to note that transactions in foreign assets and liabilities can occur between residents and should be recorded in the financial account. Current and capital account transactions are allocated to the country of residence of the counterpart. Financial account transactions are allocated on the basis of the debtor/creditor principle; assets are geographically assigned to the country of the debtor (i.e. the issuer) of the assets, while liabilities are assigned to the country of the creditor (i.e. the holder). 21

22 Central Statistics Office Current account Balance of Payments Merchandise exports and imports are valued f.o.b. (free on board) for BOP purposes (imports are valued c.i.f. [cost, insurance and freight] in the official external trade statistics and this valuation was formerly used in the BOP). Some adjustments are also made to the official merchandise trade statistics to conform to the BOP change of ownership and market valuation principles. In addition, certain exports sales of software licences which were formerly included in merchandise exports are now recorded as service exports. Services exports and imports are now given in more detail than before. Nine categories are distinguished: transport, tourism and travel, communications, insurance services, financial services, computer services, royalties and licences, business services and other services not elsewhere specified. Some specific points of note are: (i) Because of the presentation of merchandise imports on a f.o.b. basis (rather than c.i.f. as before), the freight element of the c.i.f. to f.o.b. adjustment is now included in transport. (ii) The value of insurance services provided to non-residents by resident insurers (credit) is estimated as the value of direct and supplementary premiums earned less the value of claims payable less increases in the actuarial element of insurance technical reserves. Supplementary premiums consist of investment income earned on investing the insurance technical reserves. For BOP purposes, this income is attributed to the policy holders and also treated as being paid back to the insurance company by them. To obtain the value of insurance services purchased from non-resident insurers (debit), the ratio of the estimated service charge to total premiums for insurance exports is applied to the total premiums payable to non-resident insurers. In relation to merchandise imports, the freight insurance element of the c.i.f. to f.o.b. adjustment referred to above under merchandise is recorded under insurance. (iii) Financial services covers non-interest receivables and payables in respect of financial intermediary and auxiliary services (other than those of insurance enterprises and pension funds). (iv) Exports and imports of computer software which is embedded in hardware or carried on other physical media are not included in computer services but under merchandise. Sales and purchases of software transmitted electronically as well as exports of certain software licences are now recorded under computer services (formerly, the value of such licences was included under merchandise). (v) Business services covers receivables and payables for (a) merchanting and other trade-related services, (b) operational leasing and (c) miscellaneous business services. Merchanting consists of the sales net of purchases by Irish merchants of foreign goods bought from and sold to non-residents without entering or leaving Ireland. Other trade-related services consist of commissions earned by resident agents or paid to non-resident agents in connection with imports or exports. Operational leasing covers rental receivables and payables in respect of leasing (other than financial leasing) and charter without operators of aircraft, ships and other transport or other equipment and plant. Miscellaneous business services covers legal, accounting, management consulting, public relations, advertising and marketing, research and development and other professional and technical services. It also covers inter-affiliate management fees. (vi) Other services not elsewhere specified covers construction services, personal and cultural services (e.g. fees and royalties for film, television and musical recordings and performances), educational services and government services (e.g. non-labour expenditures incurred in the host country in the provision of embassy and consular services and receipts in respect of collection of Ireland s budgetary contributions to the EU). Income covers (a) compensation of employees, which relates to the earnings of persons working outside their country of residence for less than one year and earnings of local staff working in embassies and consulates, and (b) investment income, which covers earnings arising from foreign investors investments in Ireland and Irish investors investment abroad. Investment income excludes realised and unrealised capital and exchange gains or losses. It is subdivided into three categories: 22