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Dáil Éireann díospóireacht -
Thursday, 17 May 2001

Vol. 536 No. 4

Written Answers. - Price Inflation.

Ruairí Quinn

Ceist:

13 Mr. Quinn asked the Minister for Finance if he will make a statement on the latest inflation figures; and if he will give the projected inflation figures for 2001. [14246/01]

Bernard J. Durkan

Ceist:

23 Mr. Durkan asked the Minister for Finance the degree to which he has monitored factors contributing to inflation; if there are indicators of contributory causes arising from items not included in the consumer price index; if so, the nature and origin of such factors; the measures taken or to be taken to combat these; and if he will make a statement on the matter. [14327/01]

Bernard J. Durkan

Ceist:

124 Mr. Durkan asked the Minister for Finance the extent to which the inflation rate compares on a favourable basis to that in other EU member states with particular reference to the euro zone; and if he will make a statement on the matter. [14448/01]

Bernard J. Durkan

Ceist:

129 Mr. Durkan asked the Minister for Finance if he is satisfied that Ireland can maintain a competitive edge in world markets notwithstanding recent indicators of continued inflation; and if he will make a statement on the matter. [14455/01]

Bernard J. Durkan

Ceist:

130 Mr. Durkan asked the Minister for Finance the extent to which he has identified the main contributory factors to current and projected inflation rates; the action or actions taken to curb inflationary tendencies; and if he will make a statement on the matter. [14456/01]

I propose to take Questions Nos. 13, 23, 124, 129 and 130 together.

Ireland's inflation rate as measured by the EU Harmonised Index of Consumer Prices, HICP, stood at 4.3% in the year to April 2001 well down from the peak of 6.0% in November 2000. The Netherlands at 5.3% and Portugal at 4.6% had higher April inflation figures than Ireland. The euro zone annual average for April was 2.9% compared to 2.6% for March. The consumer price index, CPI, for April was an annual rate of 5.6% compared with its November 2000 high point of 7.0%.

At budget time my Department forecasted an average CPI increase this year of 4.5% which is also the rate forecasted by the Central Bank in its spring bulletin. It is expected that inflation will continue to decline as the year progresses as external factors, such as the rise in oil prices and the fall in the euro, which pushed up the inflation rate last year, pass out of the index. My Depart ment will publish a revised inflation forecast for this year later this summer in the Economic Review and Outlook.
My Department is closely monitoring the factors affecting the inflation rate. The main influences in the figures for April included increases in the price of alcohol, food and transport. Together these three factors represented 0.68% of the 0.9% increase in the April inflation from March.
As a small open economy remaining competitive is crucial to us. We must be vigilant in relation to domestic inflationary pressures, in particular. That is why I announced an anti-inflation package of measures at budget time. This package included first, direct taxation measures to increase participation in the economy and thereby ease the labour shortages which contribute to wage pressures; second, cuts in indirect taxes to bring down the inflation rate and ease transportation costs, and third, measures to encourage consumers to save rather than to spend.
Question No. 14 answered orally with Question No. 8.
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