The Central Statistics Office says the annual rate of inflation rose slightly in March to stand at 2.2%, up from the 2.1% rate seen in February.
Consumer prices in March increased by 1%, mainly due to higher prices for fuel, clothing and footwear and more expensive health insurance premiums.
This compares to an increase of 0.9% the same time last year.
The CSO figures show that transport costs rose by 4% due to an increase in airfares and dearer petrol and diesel prices.
Clothing and footwear prices rose by 2.7% after the ending of the winter sales. Health insurance premium prices increased by 6.3%.
Breaking down the CSO figures, they reveal that petrol prices rose by 3.3% in March and diesel by 1.8%. Prices for air transport jumped by 27.5%. The figures also show that alcohol prices rose by 1.1%.
Food prices fell by 0.1%, with a 4% fall in the price of potatoes and a 4.4% decrease in the price of some cereal products. But fresh and chilled fish prices jumped 11.5% while tea prices increased by 2.1%.
Today's CSO figures also show that the EU measure of prices - which excludes mortgage repayments - increased by 1% in the month. This compares to a rise of 0.5% in March of last year.
Ireland continues to have the second lowest rate of inflation in the EU, after Sweden, which has an inflation rate of 1%. Hungary has the highest rate at 5.8%, followed by Estonia and Poland at 4.4%.
Business groups say they are concerned
IBEC, the group that represents Irish business, today said that the latest inflation figures from the CSO show that Government actions risk eroding the competitiveness gains of recent years, making it more difficult for Irish companies to compete and create jobs.
IBEC senior economist Reetta Suonperä said, "The headline inflation rate as measured by the Consumer Price Index remained broadly unchanged at 2.2% in March. The sharp jump in the EU harmonised measure (the HICP) to 2.2% from 1.6% in the previous month, however, should sound a warning bell to Government."
The Small Firms Association's assistant director Avine McNally, has said that the 2.2% inflation rate for March is a concern. "The factors contributing to the annual inflation change are for the main part, being driven by increases in public utility costs, such as housing, water, electricity, gas and transport and these costs are daily input costs for struggling small businesses."
McNally called on the government to urgently restore business costs, particularly in the sectors where it has direct control over pricing. "The Government needs to take firm action to reduce the costs it imposes on the economy, so that it is not having knock-on negative impacts on small businesses who are still fighting for survival," she added.
Stockbrokers say inflation figures will impact housholds
Davy stockbrokers said today's CPI release suggests that price pressures in the economy are somewhat stronger than they expected and stronger CPI inflation will eat into households' real incomes, which are already under pressure from weak nominal pay growth and budgetary measures.
Goodbody stockbrokers said Ireland's inflation is no longer very different to rest of euro area and this is a very different situation to 2010, when the Irish inflation rate was more than four percentage points lower than the euro area average.
They say from the point of view of competitiveness, it is productivity and producer costs that are more important. The rise in inflation in certain areas is, however, a drag on household real disposable income.
