The Central Statistics Office will this morning release the Irish consumer price index for January. Prices were unchanged in the month in December, pushing Ireland’s headline annual inflation rate down marginally to 0.2% from 0.3% in November. Meanwhile, the HICP rate, the measure used for EU comparative purposes, posted a monthly increase of 0.1% in December, and showed an annual rise of 0.4% as against 0.3% in the previous month. <p>
Domestic inflationary pressures in Ireland are likely to remain depressed for some time to come. 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. <p>
<b>Although the global economy is likely to be stronger this year than in 2013, which may lead to higher oil/energy prices, inflationary pressures in general are set to remain well contained, and we see Ireland’s headline inflation rate being below 1.0% again in 2014. We are currently forecasting an average inflation rate of 0.6%. <p>
As regards January, prices are projected to be down 0.4% in the month but up 0.3% in the year.
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