Bernard J. Durkan
Ceist:215 Mr. Durkan asked the Minister for Finance when it became known that Ireland's inflation rate was detrimental to economic interests and forecasts; and if he will make a statement on the matter. [21621/02]
Written Answers. - Price Inflation.
On budget day 5 December 2001, inflation, as measured by annual changes in the consumer price index (CPI), was forecast to average 4.2% this year. My Department's most recently published forecast was that contained in economic review and outlook, published in August, where CPI inflation was projected to average 4.5 % this year. The upward revision partly reflected the impact of higher oil prices this year.
Ireland's inflation rate has been higher than in our major trading partners for some time now and this is undermining our competitiveness. Ireland's higher inflation rate partly reflects domestic cost pressures. It is important that these cost pressures are not allowed to lead to a further deterioration in competitiveness, which would result in higher unemployment. This is why moderation in wage developments and domestic costs generally is so important.