Business

Inflation slows to 1.5% in the 12 months to June

Energy prices are estimated to have fallen by 1% in the month and decreased by 5.6% over the 12 months, new data shows

Food prices are estimated to have fallen by 0.1 per cent in the last month. Photograph: EPA

Colin Gleeson
Mon Jul 1 2024 - 11:17

The rate of inflation has slowed to 1.5 per cent in the 12 months to June and risen by 0.3 per cent since May, data from the Central Statistics Office shows.

This compares with inflation of 2 per cent in Ireland in the 12 months to May and an annual increase of 2.6 per cent in the EU Harmonised Index of Consumer Prices (HICP) for the euro zone in the same period.

Looking at the components of the flash HICP for Ireland in June, energy prices are estimated to have fallen by 1 per cent in the month and decreased by 5.6 per cent over the 12 months to June.

Food prices are estimated to have fallen by 0.1 per cent in the last month and overall increased by 2 per cent in the last 12 months.

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The HICP excluding energy and unprocessed food is estimated to have increased by 2.3 per cent since June 2023.

Paul Walsh, a spokesman for Peopl Insurance, said the “reality is that many prices are still rising and Ireland is an expensive country to live”.

“Indeed, a Eurostat report published a couple of weeks ago found that Ireland is the second most expensive country in the EU, with prices for basic goods and services a staggering 42 per cent above the EU average,” he said.

“So prices are still a challenge for many Irish households and the carbon tax increases which kicked in at the start of May – as well as the Government’s plans to restore the full excise duty on petrol and diesel in August – will only squeeze them more.

“Furthermore, there are many areas where inflation is running well above average, such as for air transport, recreation and culture, restaurants, petrol and diesel, hairdressing, home and motor insurance.”

Mr Walsh said it was “clear” that Irish households will be feeling the impact of the record-high inflation of recent years for “some time yet”.

“So it still important that Irish people do what they can to improve their household finances,” he said.

“Shopping around – so that you’re not paying more than you need to for something – has never been more important.

“While the cost of many goods and services is still high, retailers and providers are still competing for business and consumers need to leverage this competition and make it work for them.

“Shopping around will invariably help cut costs and put more money back into your pocket.”

Data from the Economic and Social Research Institute (ESRI) last week showed real wages grew in April for the first time in more than two years.

The ESRI estimates that real wages – when inflation is deduced from nominal pay growth – will expand by 2.2 per cent this year and 3.1 per cent in 2025, according to the think tank’s latest quarterly economic commentary.

The ESRI called on the Government not to use Budget 2025 – the last one before the next general election – to add to inflation.

“Significant investment is required in the domestic economy across a number of sectors,” it said.

“Therefore, it is imperative that fiscal policy be disciplined to ensure that, while the Government increases expenditure, particularly in investment, it does not additionally stimulate the economy in other areas such as taxation policy.”

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

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