IRELAND’S BALANCE of payments with the rest of the world remained in the black in 2011, according to new figures released yesterday.
A small surplus on the current account of the balance of payments of €127 million was recorded last year. This was down on the €761 million surplus in 2010. However, these figures are in sharp contrast to the large deficits run in 2007-2008 when annual imbalances of more than €10 billion were registered.
Since the euro area financial crisis, imbalances in international payments are more closely watched. Large deficits are a sign of uncompetitiveness. Ireland’s return to surplus differentiates it from the other bailed-out euro members – Greece and Portugal – who still run large deficits.
The three main sources of foreign earnings are: goods exports, services exports and income from investments abroad. The first two grew in 2011, while income inflows contracted slightly.
Receipts for exports of goods stood at just over €85 billion in 2011, while €79 billion was earned on the sale of services exports. Irish residents earned income of more than €56 billion on their foreign assets last year.
As chart 3 illustrates, services exports have become increasingly important over the past 15 years. In the final quarter of last year, receipts for services exports exceeded goods exports for only the second time.
The largest source of payments leaving Ireland are incomes earned by foreign residents on their Irish assets. Such income grew moderately in 2011, to almost €89 billion. Payments for imports of services were almost as large last year, reaching over €82 billion. Payments for imports of goods stood at €49 billion.
