Prices rise by 0.2% in the year to March - CSOThursday 10 April 2014 17.07
New figures from the Central Statistics Office show that inflation was 0.2% higher in March this year compared to last year.
The biggest rises in the year were seen in the education sector, where prices rose by 4.6%, while the costs of goods and services increased by 4.2% due to higher health and motor insurance premiums, as well as the extra costs of the local property tax.
Prices for alcoholic drinks and tobacco grew by 3.5%, while prices in restaurants and hotels rose by 2% on the back of higher drink prices.
The CSO said there were falls in the price of clothing & footwear - down 4.2% - due to sales, while prices for furnishings and household equipment were also lower due to sales.
Transport costs fell by 2.1% as a result of cheaper petrol, diesel and car prices, while communication costs decreased by 3.1% on an annual basis.
Today's figures show that consumer prices in March increased by 0.7% from February. This compares to an increase of 0.4% recorded in March of last year.
The annual inflation rate had dropped to -0.1% in February for the first time in several years, sparking fears of deflation, which encourages the belief that prices will fall further, prompting consumers to delay purchases, thereby dampening activity and employment demand.
Last week, the European Central Bank held steady on its interest rates, even though inflation in the euro area slowed sharply in March. Central banks tend to raise rates to curb high inflation and cut them when prices are rising slowly or falling.
According to the latest data compiled by the EU statistics agency Eurostat, area-wide inflation stood at just 0.5% in March, down from 0.8% in February and below the ECB's target of close to, but below 2%.
Commenting on today's CSO figures, Merrion economist Alan McQuaid said that domestic inflationary pressures in Ireland are likely to remain depressed for some time to come.
"With the euro remaining strong, pushing down import costs, energy and commodity prices still well behaved and wage pressures limited, inflation should remain quite low for the immediate future. However, we do expect an uptick later in the year, with a strengthening labour market likely prompting a gradual rise in wages," the economist added.
Mr McQuaid said at this point in time it still looks like disinflation/deflation rather than inflation is the bigger threat to the economy, both at home and in the euro zone.