Ireland's consumer price inflation has exceeded the euro zone and the EU-15 countries for the past seven years.
According to the National Competitiveness Council's Statement on Prices and Costs, inflation here increased by 17.5% between December 1999 and December 2003. By comparison, prices in the 15 EU states increased by only 8.4% over the same period.
In the four years to May 2004, the average price of Irish goods and services increased by 22% relative to our trading partners.
The NCC statement says that between 2001 and 2002, Ireland overtook the UK and Sweden to become the third most expensive country in the EU for consumer goods and services. By 2003, Ireland was almost on a par with Finland as the most expensive country within the euro zone.
Ireland is now the most expensive country in the euro zone for food, non-alcoholic beverages (retail), tobacco and rentals for housing. It is the second most expensive country for alcoholic beverages (off-licence) and for restaurants and pubs.
Irish wage levels have also been rising faster than in other EU states with salaries growing by an average of 37.1%, compared to an average growth rate of 8.7% in Germany.
Of the countries surveyed, Ireland is the second most expensive for electricity costs for industrial users. A typical industrial user pays 40% higher electricity costs in Ireland than in the UK.
'There is considerable evidence to suggest that both business costs and consumer prices in Ireland are now out of line with other advanced economies,' comments William Burgess, Chairman of the NCC.
'Our relative cost position is not justified by economic fundamentals and poses a threat to our continued economic success. Improving Ireland's international costs competitiveness must remain a high priority for Government,' he cautions.
The NCC's Statement benchmarks Ireland's performance against EU and a selection of other developed countries for the prices of consumer goods and services, wages and a selection of non-pay costs for businesses.
