Aib Group Plc · EURONEXT:A5G

Aib — The Irish Economic January 2024

14 slides from Aib's investor presentation, January 2024

  1. Slide 1: The Irish Economic Update: Economy entering 2024 in good shape

    The Irish Economic Update: Economy entering 2024 in good shape despite sharp slowdown in growth January 2024 1

  2. Slide 2: Irish economy slowed sharply in 2023 after buoyant 2021-22

    Irish economy slowed sharply in 2023 after buoyant 2021-22  GDP increased by 15.1% in 2021 and 9.4% in 2022  Domestic economy grew by 7.3% in 2021, 9.5% in 2022 % Modified* Final Domestic Demand (3 QTR Moving Average, % Yr-on-Yr) as it rebounded strongly from COVID 12  GNI* (volume) up by 13.9% i

  3. Slide 3: Survey indicators consistent with slower growth this year

    Survey indicators consistent with slower growth this year AIB Irish Mfg and Services PMIs BNP Paribas Irish Construction PMI 70 70 60 60 50 50 40 40 Manufacturing 30 30 Services 20 20 10 10 0 Nov-18 Nov-19 Nov-20 Nov-21 Nov-22 Nov-23 Nov-17 Nov-18 Nov-19 Nov-20 Nov-21 Nov-22 Nov-23 Source: Markit vi

  4. Slide 4: Mixed data on economy in 2023, labour market very strong

    Mixed data on economy in 2023, labour market very strong  Mfg PMI data weak in 2023 – in a 48.0-50.0 range over closing months of year  Services PMI eased back but still solid in H2 2023 – in a 52.5-55.0 range since August  Housing commencements picked up in 2023, at 31.5k in November compared to

  5. Slide 5: Unemployment rate falls to very low level, inflation easing

    Unemployment rate falls to very low level, inflation easing % Employment (YoY, %) Unemployment Rate 15 8.0 Private 12 7.5 9 7.0 Total 6 6.5 3 6.0 0 5.5 Public -3 5.0 -6 4.5 -9 4.0 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 Nov 17 Nov 18 Nov 19 Nov 20 Nov 21 Nov 22 Nov 23 Source: CSO via

  6. Slide 6: Exports weaken sharply in 2023 after very strong 2021-22

    Exports weaken sharply in 2023 after very strong 2021-22  Ireland is a very open economy – exports, driven by Exports as % of GDP large scale FDI, are a huge part of economy Finland  IDA reported record FDI in 2021 and again in 2022, Germany UK with continuing strong inflows in H1 2023  France Ph

  7. Slide 7: House completions rise above 30k level

    House completions rise above 30k level  Completions amounted to 20,500 in 2020 & 2021, just Irish Housing Activity 2.6% down on 2019 level despite lockdowns 40,000  35,000 Completions then jumped sharply to 30,000 in 2022 30,000  Estimated annual housing demand put at circa 30k, but 25,000 20,000

  8. Slide 8: Marked deceleration in house price inflation

    Marked deceleration in house price inflation National House Price Inflation  % % House prices declined sharply, by 55% from 2007-2013. 3.0 18.0 2.5 15.0 Prices have fully recovered - back above 2007 peak level 2.0 12.0  Low supply, remote working, strong public/institutional 1.5 9.0 demand, enhanc

  9. Slide 9: High household savings, while Debt ratios fall to low levels

    High household savings, while Debt ratios fall to low levels Irish Household Savings Ratio Irish Household Debt Ratio % % (% of Disposible Income) 35 220 30 205 190 25 175 20 160 15 145 130 10 115 5 100 0 85 Q3 2003 Q3 2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013 Q3 2015 Q3 2017 Q3 2019 Q3 2021 Q3 2023 Q1 2

  10. Slide 10: Strong economy leads to large budget surpluses

    Strong economy leads to large budget surpluses  Budget deficits in 2020 and 2021 owing to COVID General Government Balance (% GNI*)  Tax revenues rose very strongly across the board in 6 4 2021-22; up 21.5% in 2022 and 20% in 2021  2 Budget target was a deficit of €8bn for 2022, but a 0 surplus o

  11. Slide 11: Economy moves to slower growth path, but in good shape

    Economy moves to slower growth path, but in good shape  Mounting headwinds and capacity constraints, but Irish IMF Global GDP Forecasts (Oct. 2023) economy is well underpinned by many positive factors % Vol 2022 2023 2024 2025  FDI inflows continuing, boosting investment, exports World 3.5 3.0 2.9

  12. Slide 12: AIB Irish Economic Forecasts

    AIB Irish Economic Forecasts % change in real terms unless 2021 2022 2023 (f) 2024 (f) 2025 (f) stated GDP 15.1 9.4 1.0 3.7 4.0 GNP 13.9 3.9 1.5 3.3 3.5 Modified Final Domestic Demand 7.3 9.5 2.8 2.8 3.0 Personal Consumption 8.4 9.4 4.0 3.5 3.3 Government Spending 6.3 3.5 1.0 1.5 2.0 Fixed Investmen

  13. Slide 13: Changes to Global Corporate Tax Regime

    Changes to Global Corporate Tax Regime Importance of FDI:  Some 1,800 multinational companies are based in Ireland, accounting for over 300,000 jobs in direct employment  Corporation tax receipts of €22.6bn in 2022 or 27% of total tax revenue – well over 80% comes from MNCs Changes to Corporate Ta

  14. Slide 14: Risks to the Irish economy

    Risks to the Irish economy  Very open Irish economy vulnerable to weaker global outlook, including FDI inflows  Concentration risk from heavy reliance of economy on a small number of multi-national dominated sectors in terms of investment, output, employment, exports and tax receipts  Inflation a

AIB Group — The Irish Economic January 2024 on 6ix