The Forfás report on pricing shows Ireland is now among the most expensive member-states in the euro zone. Goods and services have rapidly become more expensive here since 1995, it says.
In 2001-2002 it was either the most or the second most expensive country in the euro zone for alcohol and tobacco, non-food grocery items, house rents and pubs and restaurants. The report also closely examined prices during the euro changeover period.
The PricewaterhouseCooper projections to February 2002, which suggest that Ireland may now be marginally more expensive than Germany and France, should be put in context, however.
In 1999 Ireland was the fourth most expensive country in the euro zone after Finland, Germany and France, and the seventh most expensive in the EU overall.
"It is most probable that the relative cost of consumer goods and services has increased in the period since 1999," the report says.
This contention is supported by an extrapolation of Eurostat-PPP (purchasing power parities) comparative price data for 1999 along with Eurostat 2001 data that estimate the living costs of a European Commission official located in a selection of euro zone cities.
"Both indicate that Dublin/Ireland featured among the most expensive euro zone cities/countries in 2001-2002," it notes.
The research also made use of comparative data sourced through Mercer, the human resource consultants, which advises international corporations on expatriate remuneration norms based on cost-of-living surveys in about 200 cities worldwide.
Some differences emerged between the Eurostat and Mercer data, the report notes. For example, Eurostat shows Ireland to be the most expensive country for "milk, cheese and eggs", while Mercer finds the Republic is "reasonably priced for milk and butter, but very expensive for the purchase of eggs".
When non-food retail items are placed in the Mercer basket of food goods, Ireland emerges as the most expensive country in the euro zone in which to shop. Alcohol and tobacco are the product categories most commonly identified as particularly expensive in Ireland compared to the rest of the euro zone. Significantly, the Republic is the second most expensive country in which to buy alcohol, after Finland. And it is the most expensive place to buy tobacco, after Finland.
Somewhat reassuring, however, is the fact that the Republic is consistently among the cheapest countries in the euro zone in which to buy clothes and shoes.
According to Eurostat, the relative cost of renting a house or apartment in Ireland "grew to a greater extent than any other category of good/service" between 1995 and 2002. Other data looked at suggest "there are a number of cities in which renting is more expensive than in Dublin", however.
Eurostat data studied by PricewaterhouseCoopers indicate the cost of health and transport goods/services in Ireland to be the third most expensive among euro zone member-states. Transport incorporates the cost of private vehicles. This is significant, given the role - and high relative cost - of excise duty.
Health costs include hospital services, medical products and appliances and outpatient services. Mercer data, on the other hand, show Ireland to be "relatively inexpensive" for outpatient services, but expensive for antibiotics.
Ireland was also found to be the third most expensive country in which to buy recreational goods/services in the euro zone.
The report indicates that the changeover to the euro did not appear to lead to increased inflation at aggregate level, but certain categories of consumer products did show a higher level of inflation than would have been expected.