Balance of payments deficit almost eliminated

IRELAND’S BALANCE of payments deficit with the rest of the world almost disappeared in 2010, according to the new figures released yesterday by the Central Statistics Office.

The deficit – the gap between receipts from and payments to the rest of the world – shrank to €1.1 billion last year from €10 billion in 2008, which was the widest deficit to date.

The rapid narrowing was caused by regaining competitiveness. This was reflected in higher exports of goods and services and a weaker domestic economy, which resulted in reduced imports.

Payments to non-residents – for imports, as well as returns on foreign-owned assets in Ireland and in transfers (to the EU and developing countries) – stood at €220 billion in 2010.

On the credit side, Irish residents’ earnings, which include exports receipts, returns on foreign investments and transfer payments (mostly from the EU), rose to €219 billion last year.

The balance of payments statistics provide the only detailed figures on Ireland’s unusually large exports of services.

The figures show receipts for sales of services abroad reached a record high, exceeding €73 billion. That was up from €66.6 billion in 2009 and a multiple of the €12 billion earned in 1998 when figures were first compiled.

Computer services are the largest single services export by a distance, accounting for more than one-third of the total. They reached a high in 2010 of €28.1 billion, up by a 16 per cent on 2009.

Business services, the second largest services export, also hit a record high in 2010 of €22.5 billion, an increase of 10 per cent on 2009. Insurance and financial services were, respectively, the third and fourth largest services export earners.