Aib Group Plc · EURONEXT:A5G

Aib — The Irish Economic March 2024

14 slides from Aib's investor presentation, March 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 March 2024 1

  2. Slide 2: Irish economy slowed in 2023, but domestic economy robust

    Irish economy slowed in 2023, but domestic economy robust % Modified* Final Domestic Demand  GDP increased by 9% in 2022, and fell 3.2% in 2023 (4 QTR Moving Average, % Yr-on-Yr) 12  Surge in FDI, big jump in pharma & ICT output, key factors 8 in rapid growth in 2021-22 4  Normalisation of Pharma

  3. Slide 3: 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 Export Destinations 2023 large scale FDI, are a huge part of economy  IDA reported record FDI in 2021 and again in 2022, Rest of World 20% with continuing strong inflows in 2023  Pharma,

  4. Slide 4: Survey indicators consistent with continued growth in 2024

    Survey indicators consistent with continued growth in 2024 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 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23 Feb-24 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Source: S&P Global Sour

  5. Slide 5: Early 2024 data point to continued solid economic growth

    Early 2024 data point to continued solid economic growth  Manufacturing PMI back into expansionary territory in Feb 2024 at 52.2 – 22-month high  Services PMI also higher at 54.4 in Feb 2024, fastest rise in six months  PMI for construction remained subdued at 45.9 in January. CRE drives declines

  6. Slide 6: Unemployment rate falls to very low level, inflation easing

    Unemployment rate falls to very low level, inflation easing % Employment (YoY, %) Unemployment Rate 18 8.0 15 7.5 Private 12 7.0 9 6.5 Total 6 6.0 3 5.5 0 Public 5.0 -3 4.5 -6 4.0 -9 Jan 18 Jan 19 Jan 20 Jan 21 Jan 22 Jan 23 Jan 24 Q4 2017 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 Source: CSO

  7. Slide 7: Marked deceleration in house price inflation

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

  8. Slide 8: Public & private sector balance sheets in robust shape

    Public & private sector balance sheets in robust shape Irish Household Savings Ratio Irish Household Debt Ratio % % (% of Disposible Income) 35 220 30 200 25 180 20 160 15 140 10 120 5 100 0 80 Q3 2003 Q3 2005 Q3 2007 Q3 2009 Q3 2011 Q3 2013 Q3 2015 Q3 2017 Q3 2019 Q3 2021 Q3 2023 Q3 2002 Q3 2005 Q3

  9. Slide 9: 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

  10. Slide 10: Economy moves to slower growth path, but in good shape

    Economy moves to slower growth path, but in good shape  Continuing global headwinds and capacity constraints, IMF Global GDP Forecasts (Jan. 2024) but Irish economy is underpinned by positive factors % Vol 2022 2023 2024 2025  FDI inflows continuing, boosting investment, exports World 3.5 3.1 3.1

  11. Slide 11: AIB Irish Economic Forecasts

    AIB Irish Economic Forecasts % change in real terms unless 2021 2022 2023 (e) 2024 (f) 2025 (f) stated GDP 15.1 9.4 -3.2 3.7 4.0 GNP 13.9 3.9 4.4 3.3 3.5 Modified Final Domestic Demand 7.3 9.5 0.5 2.8 3.0 Personal Consumption 8.4 9.4 3.1 3.5 3.3 Government Spending 6.3 3.5 1.7 1.5 2.0 Fixed Investme

  12. Slide 12: 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

  13. Slide 13: Risks to the Irish economy

    Risks to the Irish economy  Very open Irish economy vulnerable to weaker global outlook, including FDI inflows Tax revenues as % of total  Concentration risk from heavy reliance of economy on a small 45% number of multi-nationals in terms of investment, output, 40% employment, exports and tax rece

  14. Slide 14: Note: All Irish data in tables are sourced from the CSO

    Note: All Irish data in tables are sourced from the CSO unless otherwise stated. Non-Irish data are from the IMF, OECD and Thomson Financial. Irish forecasts are from AIB Economic Research Unit. This presentation is for information purposes and is not an invitation to deal. The information is believ

AIB Group — The Irish Economic March 2024 on 6ix