State posts surplus of €3bn on balance of payments for Q3
The Irish economy recorded its second largest balance of payments surplus in the third quarter of the year, according to new figures from the Central Statistics Office.
Total international earnings of Irish residents exceeded their payments to the rest of the world by just over €3 billion in the third quarter of 2012 – down by €200 million on the record quarterly surplus recorded in the April-June period.
The balance of payments has become a more closely watched indicator internationally since the euro crisis erupted. A deficit is a sign of uncompetitiveness. Ireland and other peripheral economies were running deficits before the crisis; only Ireland has returned to surplus.
The surplus is also important in relation to the economy’s very large foreign debts. These cannot be paid down unless a surplus is being run on the balance of payments. That the annual surplus in 2012 will almost certainly be the largest on record will facilitate the paying down of debts owed to foreigners.
Total foreign earnings accruing to Irish residents stood at €60 billion in the third quarter. Three components dominate Irish residents’ foreign earnings: receipts from services exports; receipts from goods exports; and income from investments abroad.
Income accruing to Irish residents from their foreign investments stood at €14.5 billion in the third quarter. This was in line with quarterly patterns over the past year but remains very significantly down on peaks before the financial crisis. Receipts from exports of goods stood at €21.7 billion in the third quarter – a small quarterly decline but in line with levels over recent quarters.
Services exports, which have recently become the largest source of foreign earnings, stood at €22.5 billion in the third quarter, down €300 million from the record in the April-June period. Since the depths of the international recession in the first quarter of 2009, the value of Ireland’s services exports has risen by 42 per cent.
One of the few unambiguously negative results yesterday was the large year-on-year decline in earnings from tourists visiting Ireland (classified as a services export by statisticians). A fall of over 10 per cent was recorded in the July-September period – the most important quarter for tourism.
Tourist earnings down
Tourism earnings stood at €1.14 billion, down by €137 million on a year earlier and by more than a quarter on 2007.
Earnings from computer services – the largest single source of services exports receipts – declined by almost €800 million on the quarter and were at their lowest level in a year. The second-largest earner – business services – recorded a slight rise between the second and third quarters to stand at €6.6 billion, a new record.
>Receipts from goods exports €21.7bn
>Total foreign earnings €60 billion
>Value of services exports up 42% since 2009