Irish inward FDI drops 88.1% in 2016 on previous year
While 2015 showed a record high, there was still a 40.4% drop in inward FDI on 2014
Outflows from the OECD area and the EU decreased by 9 per cent and 10 per cent respectively, partly driven by flows from Ireland and Switzerland. Photograph: AFP/Getty Images
Foreign direct investment (FDI) into Ireland dropped by 88.1 per cent in 2016 to $22.3 billion compared to the previous year, according to data released by the OECD.
While 2015 was a record year for both inward and outward FDI, the 2016 figure still represents a 40.4 per cent drop on 2014.
Outward Irish FDI in 2016 suffered a similar drop compared to the previous year, however, it increased by 7.5 per cent to reach $44.5 billion in comparison to 2014.
The jump in Irish FDI in 2015 was said to be due to financial and corporate restructuring rather than new investments. Specifically, the 2015 report highlighted tax-inversion deals, which allow companies to shift profits to the lowest tax jurisdiction in a merger.
While the OECD statistics show a decrease in FDI into Ireland, an IDA spokesperson, speaking to The Irish Times, noted the importance of a different set of figures: “IDA Ireland measures FDI in terms of jobs created and investments won. In 2016, IDA Ireland announced the highest level of employment in its client companies in its history. Total employment at overseas companies now stands at 199,877 people, the highest level on record.”
The drop in Ireland’s inflows compare to an increase of 17 per cent in the EU as a whole. EU inflows in 2016 were boosted by the acquisition of SABMiller by Anheuser-Busch InBev, according to the report.
Meanwhile, outflows from the OECD area and the EU decreased by 9 per cent and 10 per cent respectively, partly driven by flows from Ireland and Switzerland.
Record levels of flows of $147 billion in the fourth quarter of 2016 made the United Kingdom the largest recipient of FDI inflows in that quarter and the second largest recipient of FDI world wide in 2016, after the United States.
Equity capital flows to the US, the UK, and Ireland accounted for 80 per cent of the total equity flows in the OECD in 2016.