Headline inflation in the Irish economy increased slightly to 2 per cent in March, the Central Statistics Office (CSO) said on Thursday in its latest consumer price index (CPI) report, the State’s official measure of price growth.
It means prices were on average 2 per cent higher in March than they were in the same month last year, up from an annualised inflation rate of 1.8 per cent.
Inflation tied to restaurants and hotels and housing made the largest contribution to upward headline inflation in the year.
Restaurants and hotel prices were up 3.2 per cent since March 2023, the CSO said.
Housing and energy costs increased 2.2 per cent, largely driven by a 5.2 per cent surge in private and 5.8 per cent surge in local authority rents. Household electricity, fuel and gas prices, meanwhile, were down by 1.6 per cent compared with March 2023.
Alcoholic beverages and tobacco prices, which increased by 4.2 per cent in the year, and food prices, which increased by 3.3 per cent in the 12 months to the end of March, were the categories of goods with the largest increase overall over the 12 months.
March marked the first month since July 2024 in which the annual rate of inflation was 2 per cent or above, the CSO said.
Prices rose across every category of goods in the 12 months to the end of March, the CSO said, except for clothing and footwear prices, which declined by 1.9 per cent, and furnishings and household equipment, down 0.8 per cent in the year.
The latest Irish figures come at a time of uncertainty for economic growth and inflation expectations within the single currency area, stemming from the new US trade policy.
Europe on Thursday agreed to pause its retaliatory tariffs on US goods imports in its dispute with the Trump administration over steel and aluminium imports to allow time for talks. If implemented, the tariffs could boost price growth in the euro area, but economic growth may also take a hit from worsening transatlantic trade relations.
On Wednesday, before US president Donald Trump agreed to pause his so-called reciprocal tariffs, two European Central Bank (ECB) policymakers said the potential impact of the trade measures on European economic growth boosted the case for another interest rate cut later this month.
Finnish central bank governor Olli Rehn and his French counterpart Francois Villeroy, both of whom are on the governing council of the ECB, said there was room to cut rates again at the bank’s April meeting.
“Since the March meeting, many of the risks identified at that time have now either materialised or are materialising,” Mr Rehn said in a speech published by Finland’s central bank.
Mr Villeroy, meanwhile, told French president Emmanuel Macron in a letter that the ECB stands “fully mobilised” to protect the euro area in the event of any shock to the financial system as equities and US government bonds plunged on Wednesday.
He also told reporters that the uncertainty created by the Trump administration’s policies boosted the case for a rate cut.
Analysts at US banking giant JP Morgan Chase this week forecasted the ECB to cut rates four more times between now and September.
