Bernard Durkan
Ceist:240. Deputy Bernard J. Durkan asked the Minister for Finance if any inflationary tendencies have been identified in the economy; and if he will make a statement on the matter. [41551/16]
Amharc ar fhreagraTuesday, 17 January 2017
Ceisteanna (240)
Freagraí scríofa
Over the past few years consumer price inflation has been near zero in Ireland and in the euro area more generally. In 2016 annual inflation in Ireland, as measured by the Harmonised Index of Consumer Prices (HICP), averaged -0.2 per cent over the year to November and is expected to be slightly negative on average for the year as a whole.
However, in Ireland and in the euro area, there are emerging signs that inflation is starting to pick-up gradually as the drag on consumer prices from low oil prices has eased. However, the recent euro-sterling appreciation is exerting downward pressure on consumer prices domestically as the UK accounts for a large proportion of imported consumer goods.
Looking forward, futures markets for oil are suggesting a further gradual recovery in oil prices over the course of 2017. In addition, the continued growth in domestic demand and the ongoing recovery in the labour market are expected to lead to further services price inflation. Taking all these factors into account, price pressures will likely rise gradually but remain subdued into 2017. In Budget 2017, published in October 2016, my Department forecast HICP annual inflation of 1.3 per cent for 2017. My Department will update its inflation forecasts with the publication of the Stability Programme Update in April of this year.