The resident August "Government spokesman" - chief whip Seamus Brennan - wasted no time in lauding the latest set of inflation figures, saying they showed that the combination of strong growth and subdued price pressures remained. Little wonder, as the summer sales ensured that prices actually fell last month, reducing the annual rate of increase in the consumer price index to a modest 1.2 per cent.
It will be interesting, however, to see if official spokesman are so vocal later this year, when the annual rate starts to pick up, as it surely will.
The inflation figures benefited towards the end of last year from falling mortgage interest rates and dropping oil prices. But with mortgage rates having bottomed out and oil prices now rising, the annual figures in the latter months of this year will suffer by comparison with the same period in 1998.
The annual rate of inflation could thus be running at more than 2 per cent by the end of this year, and could even be in excess of 2.5 per cent on some estimates. Indeed looking at the EU harmonised figures, which exclude mortgage interest rates and some other items, the Irish rate is already measured at 1.9 per cent.
A rate of inflation of 2 to 2.5 per cent would be well above the euro zone average - now standing at less than 1 per cent. However it would not be unusual for an economy growing as rapidly as the Republic's, and rising productivity in the economy in general means that we could probably sustain an inflation rate slightly above that of our major trading partner.
However, a problem would arise if a substantially higher rate of inflation became embedded in the economy. If costs and wages here rise at a rate well above our trading partners, then the loss of competitiveness will inevitably flow through to lower growth in the longer term. In this regard the negotiations on the new national agreement - if there is to be one - will be crucial.
The trick will be to find some way to continue moderate base wage increases, while finding new ways to allow employees to share in the fruits of economic growth - such as more widespread use of profit sharing and similar schemes.
And of course the main inflationary pressure in the economy - the housing market - is not measured in the CPI and price increases here continue unabated. Rising housing costs will be another factor leading to demands for higher wage increases in the forthcoming national round.
