Foreign direct investment to State dropped from €798bn to €744bn in 2017

Direct investment both to and from the Republic declined last year, according to new figures published by the Central Statistics Office (CSO).

The statistics show foreign direct investment (FDI) to the State dropped from €798 billion to €744 billion in 2017, primarily due to a decline in investment by US multinationals, which was down €45 billion.

Irish stocks of investment overseas also declined, closing at €717 billion at the end of 2017 compared to €813 billion a year earlier.

The net FDI for Ireland at the end of 2017, according to the figures, was a deficit of €27billon, down €42 billion from the net position at the end of the prior year. Flows of direct investment into Ireland in 2017 decreased from an investment of €36 billion in 2016 to a disinvestment of €1 billion in 2017, CSO said.

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The figures confirm a recent trend in which US multinationals are increasingly sending money back home following the introduction of tax reforms under president Donald Trump.

FDI flows into Ireland in recent years had escalated, jumping €196 billion in 2015 alone due to increased investment from both Europe and the US. However, while investment from Europe has remained strong with inflows of €96 billion and €76 billion in 2016 and 2017 respectively, US investment has significantly decreased with withdrawals of €55 billon and €60 billion over the same period.

Separate figures published by the United Nations Conference on Trade and Development (Unctad) earlier this month suggest withdrawal of investment from the US has continued.

Large-scale repatriations by US multinationals following US tax reforms meant total FDI in the Republic fell sharply in the first six months of 2018. Total FDI inflows to the State declined by $81 billion (€71bn). With $2 billion of that accounted for by new investments, the figure for capital outflows is $79 billion, from a plus reading of $6 billion in the first half of 2017, to a negative $73 billion for the same six months of this year.

Astrit Sulstarova, who leads Unctad's investment trends and data section, told The Irish Times that there was no doubt the slump in FDI was as a result of US companies sending money back home.