Ireland’s gross external debt was estimated to be €1,721.6 billion at the end of 2014. On the other side of the ledger there are €2,623.8 billion of external assets in debt instruments. This means we have a net position of -€902.2bn, i.e. assets exceed liabilities. Of course, these figures are close to meaningless in any real sense as they are polluted by financial services sector.
Under the heading “IFSC” the CSO records total foreign assets of €2,757.5 billion and total foreign liabilities of €2,790.4 billion. The gross totals are immense but the net position is small by comparison. Here are the net international investment positions by sector excluding the impact of the IFSC.
Looking at the NIIP by sector is not the end of the story. We equally have to account for the MNC effect that will impact the figures for non-financial companies. For example in debt instruments alone there is €168 billion of external debt and €242 billion of external assets in debt associated with direct investment (outside the IFSC). This is further muddied by foreign direct investment into Ireland and investment abroad by Irish domiciled (and sometimes foreign-owned) companies. Part of the impact of this can be seen in the second panel which shows the NIIP by type of investment.
Ireland gross external debt (excluding the IFSC) is around €470 billion. By factoring for external assets in debt instruments the equivalent net external debt is (just) €55 billion. However, if we exclude the impact of direct investment in both directions (mainly MNCs but not exclusively foreign-owned MNCs) the situation is:
The gross external debt figure is just over €300 billion and has fallen around €100 billion over the past three years. As more of the external assets in debt instruments are associated with direct investment the net external debt figure here is €130 billion (higher than the €55 billion figure including direct investment). This has fallen by around €75 billion over the past three years.
If we look at the overall net international investment position we see the following (the chart begins in Q1 2012 as that is when the new BPM6 series start):
Note the subcategories are not the same. In the external debt chart we were able to remove assets and liabilities associated with direct investment. For the NIIP only a division by sectors is available. Thus we can show the NIIP excluding non-financial companies which in the main will reflect the activities of MNCs but not exclusively so. Outside of the IFSC and NFCs Ireland has a net external liability of €80 billion which is an improvement of €60 billion on the position at the start of 2012.