Dáil Éireann Debate, Thursday - 4 October 2012
92. Deputy Bernard J. Durkan asked the Minister for Finance the extent, if any, to which he has recognised any possible inflationary tendencies in the Irish economy; if any corrective steps are required to address any issues arising; and if he will make a statement on the matter. [42530/12]
Amharc ar fhreagraRecent years have seen inflationary pressure remain quite muted given the weakness in the domestic economy. Nevertheless, there are specific areas where inflationary pressures are emerging. Over the past year wholesale energy prices have remained elevated on account of tensions in the Middle East. Coupled with the depreciation of the euro, these higher prices have fed through to consumer price inflation. Indeed, energy price inflation was running at 10 per cent in annual terms in August. Additionally, some specific sectors have seen considerable upward price pressures, most notably insurance. I would point out however, that excluding energy prices, inflation remain subdued. In August, for instance, CPI excluding energy rose at an annual rate of just 1.1 per cent, in contrast to a headline CPI rate of 2.0 per cent.
In terms of corrective steps to reduce costs for consumers, the Deputy will be aware the prices of utilities are now set by independent regulators. I would stress that the Government is introducing a series of structural reforms, to bring down the cost of doing business, which should help reduce consumer price inflation more generally.
