The pace of inflation in Ireland has slowed down to 7% annually, thanks to falling energy prices. The CSO’s harmonised index of consumer prices has released new figures showing a month-on-month increase of 0.9% since February 2023. Despite a slight decrease of just under 1% in energy prices, the current inflation rate is still a significant improvement compared to the 8.1% HICP inflation in Ireland in the 12 months to February 2023. In the same period, the HICP for the Eurozone showed an annual increase of 8.5%. The CSO has published its estimates for the 12 months to March 2023 ahead of Eurostat’s latest inflation figures to be released on March 31st. The CSO based their estimates off of the EU Harmonised Index of Consumer Prices (HICP).
Despite the falling energy costs, food prices are estimated to have increased by 1.1% in the last month and by 13.5% year-on-year. Similarly, transport costs have risen by 2.2% in the month and increased by 0.6% in the 12 months to March 2023. Anthony Dawson, a CSO statistician, said, “Looking at the components of the flash HICP in Ireland for March 2023, energy prices are estimated to be to have decreased by 0.9% in the month and increased 11.7% since March 2022.” The HICP excluding energy is estimated to have increased by 6.3% since March 2022.
Despite the two recent ECB rate hikes, which saw its main refinancing rate increase by a combined 100 basis points since February this year, there has been a month-on-month inflation increase. The Central Bank’s main interest rate now stands at 3.5%, up from 0% in July 2022.
The decrease in energy prices has been a welcome relief for many Irish consumers. However, the rise in food and transport costs has somewhat offset the benefits. The food industry has been hit hard by supply chain disruptions, which have resulted in higher prices. The transport sector has also seen rising costs due to higher fuel prices and supply chain issues.
The Irish government has been closely monitoring the situation and has taken steps to address the rising costs. The government has announced several measures, including tax cuts and subsidies, to ease the burden on consumers. The Central Bank has also been closely monitoring the inflation rate and has taken steps to control it. The recent rate hikes are part of a broader strategy to keep inflation under control.
The Irish economy has been recovering from the COVID-19 pandemic, and the decrease in inflation is a positive sign for the country’s economic growth. The government’s efforts to address rising costs and the Central Bank’s measures to control inflation are expected to have a positive impact on the economy. The Irish people are hopeful that the current trend of decreasing inflation will continue, and the country will see sustained economic growth in the coming years.