The country’s balance of payments current account deficit for the first quarter of 2009 was just over €2.5 billion, over €1.6illiion lower than the same period last year, according to the Central Statistics Office.
The balance of payments measures the economic transactions between Ireland and the rest of the world.
The increase during the first quarter of this year means that while Ireland still imported more than it exported, the rate of decline in imports was steeper than the decline in exports.
The figures show while the country’s level of imports was affected by the fall in domestic demand, Ireland’s export sector remained robust in the face of the economic slowdown.
Exports of goods and services fell 3 per cent compared with the same period last year, with goods down 3.1 per cent and services down 2.8 per cent. However, imports of goods and services declined by 11.7 per cent on an annual basis, with goods down 25 per cent but services up 0.2 per cent.
The higher income deficit is mainly a result of reduced imports, but reduced profits and interest earnings by Irish-owned businesses abroad, as well as a drop in service exports, particularly in the insurance and financial sectors were also contributory factors.
The value of profits and interest from foreign-owned enterprises in Ireland leaving Ireland for abroad also increased by 9.33 per cent from the previous quarter, to a figure of €8.6 billion for the first quarter of 2009.
Commenting on this morning’s figures, Alan Mc Quaid of Bloxham Stockbrokers said that the performance of the export sector is welcome. “Given that the export side will be key to the Irish economic recovery going forward, the fact that exports are performing relatively well despite a weak global economy augurs well for the future.
“Although on paper this is set to be an extremely difficult year for Irish exporters, the trend in the year to date has been better than expected” he said.
Separate figures from the CSO show that Ireland’s external debt increased to €1.69 trillion at the end of the March – an increase of €32 billion on the previous quarter.
The figures for the period January to March showed that the liabilities of monetary financial institutions fell to €723 billion, from €778.38 billion at the end of he previous quarter, a sign of reduced lending in the sector.
However, the debt held by monetary authorities, which includes the Central Bank and the FSA, mushroomed to €94.86 billion, more than double the previous quarter, reflecting an increase in the institutions’ liabilities to the European System of Central Banks.
The liabilities of ‘other sectors’ which includes insurance funds, asset finance companies, increased by 4.7 per cent from the previous quarter, to over €620 billion, while direct investment debt liabilities showed an increase of almost €7 billion to €194 billion.
