Irish Inflation Falling, Still Above EU Average

by Amanda Banks, Tax-News.com, London

15 August 2002

New Consumer Price Index (CPI) figures released for Ireland on Monday have revealed that although annual inflation has fallen for the third consecutive month, to 4.2%, the level in the Republic still remains 250% higher than the EU average.

Commentators have suggested that widespread summer sales can account for July's decrease, and indeed the Central Statistics Office figures bear this out, showing a drop in price of 11.5% for clothing and footwear, and 1.5% for furnishings and household equipment.

The costs for other items, such as restaurants and hotels, food, drink, housing and utilities all remained reasonably stable, according to the CSO figures.

However, there are concerns that the picture of Irish inflation painted by the Consumer Price Index figures is not an accurate one, as July's data does not take into account various government-approved tax changes which are expected to impact adversely on the inflation rate in the near future.

The Irish Independent reported this week that the Opposition launched a stinging attack on the government following the release of the figures, accusing the coalition of 'continued complacency' in the face of repeated warnings on the state of the economy:

'All international comparisons show Ireland as one of the most expensive countries in Europe, jeopardising future partnership agreements and job prospects,' Fine Gael's Finance Spokesman, Richard Bruton warned, continuing:

'The Government's complacency about this embedded inflation is disturbing. Insurance costs are so far out of line with other countries they have become a crippling burden. Repeated promises to tackle these problems are wearing thin.'

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