Dáil Éireann díospóireacht -
Tuesday, 20 Feb 2001

Vol. 530 No. 6

Written Answers. - Inflation Rate.

Bernard J. Durkan

Ceist:

67 Mr. Durkan asked the Minister for Finance if inflation rates are in accord with those within the euro zone; if the cause or causes of inflation have been identified; and if he will make a statement on the matter. [4614/01]

Brendan Howlin

Ceist:

81 Mr. Howlin asked the Minister for Finance if he will make a statement on the latest inflation figures; the projected inflation figure for 2001. [4669/01]

Ivor Callely

Ceist:

180 Mr. Callely asked the Minister for Finance the expected domestic inflation rate in 2001; and if he will make a statement on the matter. [4425/01]

Bernard J. Durkan

Ceist:

205 Mr. Durkan asked the Minister for Finance if he has had regard for the various ERSI reports on the economy with particular reference to inflation levels; if he proposes any action arising from such reports; and if he will make a statement on the matter. [4955/01]

Bernard J. Durkan

Ceist:

211 Mr. Durkan asked the Minister for Finance if he satisfied himself with inflationary trends in the economy in the past three years; and if he will make a statement on the matter. [4961/01]

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 67, 81, 180, 205 and 211 together.

Ireland's annual inflation rate, as measured by the consumer price index, was 5.2% in January 2001. This compares with a rate of 7% in November and 5.9% in December. The annual average rate of inflation was 2.4% in 1998, 1.6% in 1999 and 5.6% in 2000. The latest projections published by my Department on budget day forecast that inflation will average 4.5% in 2001, 3.5% in 2002 and 2.5% in 2003.

Ireland's inflation rate, as measured by the EU Harmonised Index of Consumer Prices, HICP, was 3.9% in January. This compares with 6% in November and 4.6% in December. The inflation rates of the 15 EU countries are set out in the Table below. This table shows that Ireland's inflation rate is lower than or close to the rate in several EU Member States.

Table 1: Inflation rates, as measured by HICP, for EU

countries.

Country	Inflation Rate (a)
Luxembourg	4.3%
Netherlands (b)	4.2%
Spain	4.0%
Ireland (b)	3.9%
Portugal	3.8%
Greece	3.7%
Belgium	3.0%
Finland	2.9%
Italy	2.8%
Denmark	2.3%
Germany	2.3%
Austria	1.8%
France	1.7%
Sweden	1.3%
United Kingdom	0.9%
EU 15	2.3%
Eurozone	2.6%

(a)December 2000 inflation rates

(b)January 2001 inflation rates.

As the House is aware, inflation increased significantly during 2000 due to the sharp increase in oil prices, the fall in the value of the euro, increases in excise duty on tobacco, and an increase in underlying domestic inflation.

Headline inflation has fallen in recent months because of the reduction in VAT and excise duties in the 2001 Budget and because the price of oil has fallen from its peak of over $30 per barrel in November 2000. This has been reflected in falls in retail petrol prices, and the euro has risen by more than 5% against both the US dollar and Sterling, reducing pressure on imported prices. I am aware of the concerns expressed by agencies such as the ESRI about the inflation rate. The Government shares these concerns and will continue to take action, where appropriate, to address price stability.