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Dáil Éireann díospóireacht -
Thursday, 30 Nov 2000

Vol. 527 No. 2

Written Answers. - Consumer Price Index.

Deirdre Clune

Ceist:

36 Ms Clune asked the Minister for Finance his projection for the consumer price index for the next two months; and if he will make a statement on the matter. [27973/00]

Proinsias De Rossa

Ceist:

51 Proinsias De Rossa 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 6.8%; the way in which this com pares with the EU average; if he will give the estimated figure for inflation by the Department at the time of the December 1999 budget; the way in which this compares to the actual figure; his Department's estimate for inflation during 2001; 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. [27989/00]

Bernard J. Durkan

Ceist:

97 Mr. Durkan asked the Minister for Finance the way in which inflation levels here compare to those in other European countries; if Ireland is in danger of becoming uncompetitive; and if he will make a statement on the matter. [28127/00]

Bernard J. Durkan

Ceist:

98 Mr. Durkan asked the Minister for Finance the measures he has put in place to reverse inflationary trends; and if he will make a statement on the matter. [28128/00]

I propose to take Questions Nos. 36, 51, 97 and 98 together.

Inflation, as measured by the CPI, was 6.8% in the year to October 2000. On the basis of the harmonised index of consumer prices, inflation was 6% in October compared with the EU average of 2.4%. The inflation rates for other EU countries are set out in the following table.

Table 1: Inflation in EU countries in October 2000

Country

Inflation Rate as measured by HICP

Austria

2.1%

Belgium

3.7%

Denmark

2.8%

Finland

3.7%

France

2.1%

Germany

2.4%

Greece

3.8%

Italy

2.7%

Luxembourg

4.3%

Netherlands

3.2%

Portugal

3.4%

Spain

4.0%

Sweden

1.3%

United Kingdom

1.0%

EU 15

2.4%

Euro zone

2.7%

At the time of the December 1999 budget, the Department of Finance forecast that inflation would average 3% for 2000 as a whole. This was based on a technical assumption of unchanged interest rates, exchange rates and commodities prices. As Deputies are aware, oil prices have increased over the course of this year, the ECB has increased interest rates from 2.5% on budget day to the current rate of 4.75% and the euro declined. These unforeseen developments explain much of the increase in inflation this year.
While I do not propose to begin making forecasts of monthly inflation, I will say that in common with most forecasters, I expect the measured inflation rate to fall from December and into next year as the impact of a number of external factors which pushed up inflation this year begin to ease. My Department's latest assessment of the outlook for inflation will be published on budget day.
Last June the Government announced a number of measures to combat inflation. These included reform of the licensed trade, the imposition of temporary price controls on alcohol, no new increases in charges and levies by public bodies. Additional staff and resources were also announced for the Office of the Director of Consumer Affairs to initiate a vigorous programme of price monitoring and publicity. The Government is closely monitoring the impact of these measures and recent indications are that they are working. The question of further measures is being considered in the context of the budget.
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