22/12/2011: Irish Foreign Assets and Liabilities: Q3 2011

Some interesting data courtesy of CSO's Quarterly International Investment Position and External Debt for Q3 2011.

The summary:

Yep, pretty dramatic. The above is in billions of euros. Let's look at the historical series and decomposition by IFSC and non-IFSC:

• Overall Total Foreign Assets in the country amounted to €2,587,566 million (€2.59 trillion) in Q3 2011, which is up on €2,544,483mln in Q2 2011. Total Foreign Assets are up 1.69% qoq and down 1.51% yoy.
• Of the above, €2,093,152mln accrues to IFSC or 80.89% of all our Foreign Assets. This is up from €2,039,307mln in Q2 2011. IFSC assets are up 2.64% qoq and 1.35% yoy.
• Non-IFSC Foreign Assets amounted to €494,404mln or 19.11% of our total Foreign Assets. These assets are down 2.13% qoq and 11.99% yoy.
• Overall, Total Foreign Liabilities (Debt) are up from €2,678,809mln (€2.68 trillion) in Q2 2011 to €2,735,556mln (€2.74 trillion) in Q3 2011. Total Foreign Liabilities are now 2.12% qoq but down 1.50% yoy.
• Of the above, €2,072,484mln accrues to IFSC or 75.76% of all our Foreign Liabilities. This is up from €2,007,592mln in Q2 2011. IFSC liabilities are up 3.23% qoq but down 0.2% yoy.
• Non-IFSC Foreign Liabilities amounted to €663,072mln or 24.24% of our total Foreign Liabilities. These debts are down 1.21% qoq and down 5.34% yoy.

Charts illustrate:

The above figures are massive, but the balance of them is shocking:

• In Q3 2011, Net External Liabilities position (Net IIP) was €148,000mln up 10.18% qoq but down 1.37% yoy
• The above accounted for the surplus of €20,668mln in IFSC - down 34.83% qoq but up 282% yoy
• Which means that non-IFSC net debt was €168,668mln - more than our entire GDP - which is up 1.58% qoq and 21.6% yoy.

Yes, that's right - the 'bad' IFSC had a positive impact on our net External Liabilities position in Q3 2011, while the 'good' Ireland Inc had a massive shortfall of more than 100% of its GDP.

So now, let's think in relative terms - relative to our GDP:

• In Q3 2011 our Total Gross External Liabilities stood at a massive 1,738.9% of our GDP
• Of the above, 1,317.4% of our GDP was accounted for IFSC, and
• 421.5% of our GDP was captured by non-IFSC.

Now, that's pretty impressive... 17.4 times the GDP! And even at 4.2 times the GDP for non-IFSC foreign liabilities (keep in mind, these are just foreign liabilities, not capturing internal debts and other internal liabilities) we are pretty heavily under water.

Economics 1/10/10: External Debt

Yesterday, CSO published Q2 2010 data on our International Investment Position.

Here are some highlights:

"At 30 June 2010, the gross external debt of all resident sectors (i.e. general government, the monetary authority, financial and non-financial corporations and households) amounted to €1,737bn." So Irish total gross external debt rose €63bn qoq.

Our total foreign liabilities stood at €2,643bn and are offset by €2,500bn of foreign assets.

The liabilities also include €1,218bn of equity and derivative liabilities that do not form part of external debt.

Liabilities of the Monetary Authority (to ECB) that consist almost entirely of short term loans and deposits, amounted to €66bn, an increase of €28bn on Q1 2010, but down €38bn on Q2 2009.

General government foreign borrowing decreased by over €3bn to €80bn between end-March and end-June 2010.

The liabilities of other sectors (financial intermediaries and non-financial corporates) increased by €17bn from Q1 and at €657bn represented 38% of the total debt, a similar share to the
previous quarter.

Direct investment liabilities increased by €17bn to €262bn in Q2

Liabilities of monetary financial institutions (credit institutions and money market funds) consisting mostly of loans and debt securities were €672bn, an increase of over €5bn on Q1, but down €18bn on Q2 2009.

Few charts. Starting with levels of assets and liabilities:
Next, balance:
Notice declining surplus in Other Sectors.

Combining assets and liabilities:
Lastly, removing Government from the equation:
Clearly, a sign of expanding liabilities and rising assets, with net balance on the negative side slightly worse than in Q1.

Summarizing these in tables: