Consumer prices rose by 0.2 per cent in the year to March, new data from the Central Statistics Office showed today.
The marginal increase was attributed to increases in the cost of education, which was 4.6 per cent higher year on year as tuition fees for third level climbed higher, while alcohol and tobacco increased 3.5 per cent, as excise duties rose due to changes introduced the budget. A rise in the cost of health and motor insurance premiums, combined with the local property tax levied on householders, also contributed to inflation. The cost of clothing fell by 4.2 per cent over the year, with communications down 3.1 per cent.
On a monthly basis prices were prices rose 0.7 per cent, lifted by a rise in the cost of clothing and footwear, and transport, as airfares increased in price.
Merrion Economics said deflation rather than inflation was the bigger threat to the economy, and not just in Ireland.
“Although the global economy is likely to be stronger this year than in 2013, which may eventually lead to higher oil/energy prices, inflationary pressures in general are set to remain well contained,” economist Alan McQuaid said.
The EU Harmonised Index of Consumer Prices (HICP) increased by 0.3 per cent in the year and 0.5 per cent in the month.
“While ECB rates and energy prices continue to act as a drag on prices, domestically-driven services price inflation is now growing at the fastest rate in two years, in-line with the recovery in the Irish economy,” Davy Stockbrokers said in a note.
“Looking ahead, the impact of a late Easter this year compared to last year means that inflation may well tick up a little further in April; however, the impact of benign energy prices and interest rates should offset price rises in the domestic economy, keeping headline inflation below 1 per cent for most of the coming year.”
