Headline inflation in the Irish economy slowed to 7 per cent in March, led by lower energy prices internationally.
This was down from an annualised rate of 8.1 per cent in February and comes on the back of a prediction from the Economic and Social Research Institute (ESRI) this week that inflation here could fall as low as 4 per cent this year.
The latest EU Harmonised Index of Consumer Prices (HICP) for the Republic, collated by the Central Statistics Office (CSO) indicates prices rose by an average of 7 per cent in the 12 months to March and by 0.9 per cent on a monthly basis.
The figures suggest energy prices decreased by 0.9 per cent in March but were still up 11.7 per cent in annual terms.
Food prices are estimated to have increased by 1.1 per cent in the last month and increased by 13.5 per cent in the last 12 months, while transport costs were up by 2.2 per cent month on month and by 0.6 per cent on last year.
The HICP excluding energy is estimated to have increased by 6.3 per cent since March 2022.
Policymakers are concerned that falls in the headline rate of price growth are not being matched by falls in core inflation, which strips out energy, suggesting higher prices in some areas are proving stickier than expected.
As the European Central Bank raised interest rates by a further 0.5 per cent earlier this month to deal with inflation, the bank’s chief Christine Lagarde said, “We are seeing some slight improvement in certain areas [of underlying inflation], but frankly, not a lot.”
“The pace [of monetary tightening] that we take will be entirely data-dependent,” she said.
