Further evidence of the boom in consumer spending has emerged with new figures showing a 17.2 per cent year-on-year rise in the value of consumer spending last February.
But data released by the Central Statistics Office (CSO) yesterday showed that the value of sales in February was 0.6 per cent lower than in January.
The volume of sales was 13.4 per cent stronger in February than in the same month last year, said the CSO.
In the three months to the end of February, the volume of sales was 4.9 per cent stronger than in the three months to the end of November last year.
This figure provides a "more stable" indication of underlying economic trends, according to the CSO.
Economists said the figures reflected continuing confidence in the economy, as spending rose in anticipation of tax cuts introduced in the Budget last December.
Mr Eunan King, senior economist at NCB Stockbrokers, said there was also evidence of increased spending in the Republic by Northern Ireland residents, reflecting the strength of sterling.
However, Davy Stockbrokers chief economist, Mr Jim O'Leary, said the "payback" in terms of spending during February was less than expected after a substantial rise in consumer spending in January. The rise in January was due to increased demand for cars.
Though the retail sales index does not provide a measure of inflation per se, an "implied" rate of inflation, known as an "implied price deflator", can be derived from the figures.
A CSO spokeswoman said the deflator in February was 3.4 per cent, up from 3.3 per cent in January. This compared with the official consumer price index inflation rate of 4.3 per cent in February and 4 per cent in January.
Asked whether the growth of retail sales was fuelling inflation, Mr O'Leary said its influence was modest. Rising prices of imported goods was a greater factor, he said.
"I don't believe the strength of retail sales has played a strong role in pushing up inflation. The positive rate of growth in retail sales has been in or about the 7-9 per cent range year-on-year since the middle of 1997 and there hasn't been any material trend there over that period."
