Dáil Éireann díospóireacht -
Thursday, 26 Oct 2000

Vol. 525 No. 1

Written Answers. - Inflation Rate.

Bernard J. Durkan

Ceist:

22 Mr. Durkan asked the Minister for Finance if he is concerned that inflation levels have seriously eroded incomes in the past 12 months; if he anticipates the necessity to take any corrective measures with the objective of maintaining our competitive position in international markets; and if he will make a statement on the matter. [23631/00]

Thomas P. Broughan

Ceist:

75 Mr. Broughan asked the Minister for Finance if he will give the projected level of inflation for the current year, having regard to the most recent figures showing a continuing year on year increase of 6.2%; the way in which this compares with the EU average; the steps he will take to deal with the inflation rate in view of the serious implications for social partnership and economic development; and if he will make a statement on the matter. [23457/00]

Bernard J. Durkan

Ceist:

113 Mr. Durkan asked the Minister for Finance the degree to which inflation has increased or decreased in the past 12 months; and if he will make a statement on the matter. [23723/00]

Bernard J. Durkan

Ceist:

115 Mr. Durkan asked the Minister for Finance the plans he has to check inflation in the next financial year; and if he will make a statement on the matter. [23725/00]

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 22, 75, 113 and 115 together.

Inflation, as measured by the CPI, was 6.2 % in the year to September 2000. The rate as measured by the EU-harmonised HICP was 5.5 % in September, and was the highest in the EU. The EU HICP average was 2.5 % in September, while that of the Eurozone was 2.8 %.

My Department published last August in its economic review and outlook an average inflation estimate of 5.25 % for this year. It will publish its next inflation forecast with the budget which will cover both this year and the period 2001-03.

Inflation this year has been higher than expected and, as is well known, this is due to a variety of external, once-off and domestic factors. However, despite the recent increase in inflation employees have, this year, received increases in take home pay of between 10% and 14%.

The Government is determined to control inflation. This is because the recent increase in inflation has the potential to adversely affect our competitiveness and undermine economic growth. A balance must be achieved between improving living standards and sustaining competitiveness.

Social partnership has worked in the past and the Government is confident that by working together with the social partners we can overcome our present difficulties.

As the House is aware, a number of measures to combat inflation were introduced in June. These included measures to promote competition and the freezing of prices and charges in a number of sectors. The Government is closely monitoring the impact of these measures, and recent indications are that they are working.

The next budget will contain a balanced set of measures which will take account of prevailing economic conditions and which will be positive in terms of continued economic development and social progress. I will, of course, have regard to the commitments contained in the Programme for Prosperity and Fairness in the context of the strategy for the budget.