Bernard J. Durkan
Ceist:206 Mr. Durkan asked the Minister for Finance if he expects the inflation rate to be within the necessary parameters to facilitate the competitiveness of the economy; and if he will make a statement on the matter. [25920/02]
Written Answers. - Inflation Rate.
The latest inflation projection published by my Department was included with the budget documentation. It estimated then that inflation, as measured by annual changes in the consumer price index, would be 4.8% in 2003. The increase in the CPI will be higher in the next few months but will ease as the year progresses. Accordingly, my Department projects a further easing beyond 2003 to around 2½% by 2005.
The main driving factor behind Ireland's current inflation rate is the high level of services sector inflation. This partly reflects the high levels of wage increases in the economy. It is important that wage pressures are not allowed to lead to a deterioration in competitiveness which would result in lower growth and higher unemployment.