Ireland’s Capital Stock

The CSO has released new estimates of Ireland’s capital stock, which makes for very interesting reading: see the press release here and the detailed file here.

7 replies on “Ireland’s Capital Stock”

This is a very welcome publication. A very useful extension of these data (for any interested economist(s)!) would be estimates of the state’s share of ownership by sector and asset type – and, within that, the shares included in the regulatory assets bases estimated by the various sector regulators.

For some time, Colm McCarthy has been recommending a deleveraging of the state’s balance sheet. These data get us much closer to a view of the state’s balance sheet.

The deleveraging is now urgent, given the deflationary environment. However a firesale is always possible where public assets are concerned but not private ones, else why NAMA?

Given the shortage of credit aided by a crowd out by this government, the value realized will be even less!

Even good economic advice plays into the hands of a well organized kleptocracy!


The global imbalances – and resulting liquidity glut – that played a major role in the global financial crisis have been diminished, but, like you know who, haven’t gone away. In addition, pension and insurance funds, even if they have been stung by the recent lunacy, are always keen to invest in relatively low-risk, but steady yield assests. The global appetite for increasing volumes of sovereign debt is uncertain; it would make sense to investigate the appetite for slightly higher-yielding, regulatory-determined, but not state-guaranteed investments. This need not lead to a fire-sale.

I’m simply attempting to draw a distinction between publicly-owned assets the return on which imposes a call on citizens as taxpayers and those whose return imposes a call on citizens as consumers of goods and services. For many semi-states the realised value of the equity would be less than the current crazily inflated value determined by sector regulators, but it would likely be higher than the current book value on an historic cost basis.

This report puts the debate about indebtedness in Ireland into perspective. Net assets in Ireland have been rising by about 20 billion euros annually for the last decade. That is, in constant price terms, excluding any price changes. Total net assets are up by over 200 billion euros in a decade. On average, each household in the country owns 125,000 euros more net assets in 2008 than in 1998, again in constant price terms, excluding any price changes. Undoubtedly, this is a reflection of the massive level of investment in the economy in the past decade.

Welcome back, JtO. Hope you had a good Xmas.

I don’t think anybody would deny the scale of the investment. A few questions are relevant, however. Is the composition of investment appropriate to maximise future economic growth and productivity gains? Does the composition require alteration given current and likely near term changes in relative asset values? If necessary, how may this be achieved?

And the data present the asset side of the balance sheet. A really important question is: how have these net assets been financed? The nature of the financing of investment and trading is the key area that was ignored internationally in the run-up to the global financial crisis. Ireland was not immune from both irrational and inefficient financing of investment activities. Getting the financing of investment right poses a major challenge for both the public and private sectors.

JtO: the CSO figs are net of depreciation, not of debt. Their gross figs are acquisition cost, before depreciation. All clear from the notes.

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