Vol. 573 No. 5
22 Mr. Allen asked the Minister for Finance his latest estimates of the improvement in the price index of imported goods and of exported goods in the past 12 months; and the way in which these affect his estimate of inflation. [25845/03]
I assume that the Deputy is referring here to the Central Statistics Office trade release, which measures the price of traded goods. The price of exports, which has no direct impact on inflation, has fallen by 6% for the first seven months of this year in comparison with the same period last year. The year on year change in the price of imports for the first seven months of this year has fallen by 4.7% in comparison with the same period last year. This fall in the price of imports has a positive effect on Irish inflation.
Inflation has fallen from more than 5% at the start of the year to 2.9% in September, as a result of the sustained strength of the euro and other favourable developments, including falling import prices and mortgage interest rates and easing services sector inflation. My Department forecast in the economic review and outlook published last August, that inflation would average 3.6% this year. A revised forecast will be published on budget day. This forecast will, as usual, be based on the technical assumption of unchanged interest and exchange rates.
