Consumer prices up 0.2% in year to December

Thursday 16 January 2014 17.05
CSO figures show that alcohol and tobacco prices rose by 5.7% over the year
CSO figures show that alcohol and tobacco prices rose by 5.7% over the year

Consumer prices rose by 0.2% in December compared to the same time the previous year, the latest figures from the Central Statistics Office show.

Alcohol and tobacco prices rose by 5.7% over the year, while education costs increased by 4.5% due to a rise in third level education costs. Prices in hotels and restaurants grew by 2.8% on the back of more expensive alcohol.

Clothing and footwear prices fell 4% over the 12 month period due to sales, while furnishings, household equipment declined by 3.7%.

Communication costs fell by 2.4% while transport prices eased 1.1% in the year on the back of cheaper petrol and diesel.

Prices were unchanged in December compared to November, the CSO added.

Commenting on today's figures, Merrion economist Alan McQuaid said that domestic inflationary pressures in Ireland are likely to remain depressed for some time to come. 

He said that "subdued" consumer demand will in general continue to put downward pressure on prices in the months ahead. 

"The residential property tax has hit disposable incomes hard, which in turn is weighing negatively on spending power. And it should be remembered that the full-year effect of the property tax has yet to be felt," the economist said.

Investec economist Philip O'Sullivan said that the muted overall rate of inflation in the economy continues "to provide an element of respite for Irish consumers".  

Meanwhile, euro zone inflation is unlikely to slow further and the current low level is not a major threat to economic recovery, Eurogroup President Jeroen Dijsselbloem said while in Beijing for talks with Chinese leaders.