Business

Irish inflation drops to three-year low of 0.1%

CSO says weaker level of price growth driven by falling energy prices

The weaker level of inflation in Ireland was driven mostly by falling energy prices, which are down 13.5 per cent on the same point last year. Photograph: Niall Carson
The weaker level of inflation in Ireland was driven mostly by falling energy prices, which are down 13.5 per cent on the same point last year. Photograph: Niall Carson
Eoin Burke-Kennedy
Wed Oct 30 2024 - 11:50

Inflation in the Irish economy has fallen to a fresh three-year low of almost zero amid the ongoing drop in energy prices.

The latest flash estimate for the harmonised index of consumer prices (HICP) put the annualised rate of price growth in October at 0.1 per cent. This compares to a euro zone average of 1.7 per cent for the 12 months to September.

The latest HICP data from the Central Statistics Office (CSO) also revised the headline rate of inflation in Ireland in September down to zero per cent from a previous reading of 0.2 per cent.

The weaker level of inflation was driven mostly by falling energy prices. The HICP excluding energy and unprocessed food was estimated at 1.7 per cent.

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The Irish rate will feed into wider euro zone inflation data due out on Thursday. The euro zone figures are expected to pave the way for further European Central Bank (ECB) interest rate cuts.

Amid a fast-than-expected softening in inflation, Frankfurt is expected to implement four further rate cuts between now and next March, the first of them in December.

While energy prices are estimated to have grown by 0.3 per cent in October, they were down by 13.5 per cent over the 12 months to October.

Food prices are estimated to have increased by 0.4 per cent in the last month and are up by 1.8 per cent in the last 12 months.

The HICP differs from the CSO’s consumer price index (CPI), the official measure of inflation in the Republic. as the former does not include items like mortgage repayments and building materials prices. Inflation as measured by the HICP has fallen quicker than under the “official” consumer price index.

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Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times

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