Vol. 553 No. 5
187 Mr. Durkan asked the Minister for Finance if inflation rates here are in keeping with those in other EU countries with particular reference to the need to maintain competitiveness; and if he will make a statement on the matter. [14675/02]
In terms of EU comparisons, the appropriate measure of inflation is the harmonised index of consumer prices, HICP. On this basis, the Irish inflation rate averaged 5.0% in the first five months of 2002. This compares to an average of 2.2% in the EU and 2.4% in the euro area in the first five months.
Inflation is higher in Ireland than in the rest of the EU partly as a result of domestic cost pressures. It is important that these cost pressures are not allowed to lead to deteriorating competitiveness which would result in higher unemployment. This is why wage moderation, and cost moderation more widely, are so important.
