Cathal Crowe
Ceist:115. Deputy Cathal Crowe asked the Minister for Finance his expectations for living standards for households in the remainder of 2024; and if he will make a statement on the matter. [22567/24]
Amharc ar fhreagraTuesday, 21 May 2024
Ceisteanna (115)
Freagraí scríofa
The most significant challenge to households’ living standards in recent years has been inflation which has put pressure on real household incomes. Inflation reached multi-decade highs in 2022, averaging 8.1 per cent with a peak of 9.6 per cent in June 2022 (as measured by the HICP). Whilst the initial driver of this inflationary pressure was a surge in global energy prices, it subsequently became increasingly broad-based as price pressures spread throughout the economy.
Since then, enormous progress has been made in reducing inflation with headline HICP inflation of just 1.6 per cent in April. Across the year as a whole ,Department is forecasting an average inflation rate of just over 2 per cent.
Despite significant challenges, the labour market has performed remarkably well in recent years. The unemployment rate averaged just 4.3 per cent last year, alongside employment growth of 3.4 per cent. Looking ahead, my Department expects employment to continue to expand this year, and forecasts pay growth of 4.5 per cent on a per-head basis. With inflation expected to continue to ease over the near term, real wages are projected to return to growth this year, with workers regaining purchasing power.
Therefore, my expectation is that falling inflation combined with robust wage growth will boost real household incomes and living standards significantly throughout the year.