Minister welcomes inflation falling to its lowest level since April 2021

The finance minister has welcomed figures that indicate inflation in Ireland has fallen to its lowest level in over three years.

The EU Harmonised Index of Consumer Prices (HICP) indicates inflation increased by 1.1% in Ireland in the 12 months to August and rose by 0.1% between July and August.

This is the lowest rate of inflation since April 2021 and was mainly driven by a significant fall in energy prices, which declined by 9.5% in August.

The August rate compares with 1.5% in the 12 months to July and an annual increase of 2.6% for the eurozone during the same period.

Food prices are estimated to have risen by 0.1% in the last month and increased by 2% in the last 12 months, while transport costs decreased by 0.9% in a month and rose by 4.3% in a year.

Core inflation, excluding energy and unprocessed food, is at 2.3%.

Minister for Finance Jack Chambers said that after years of prices rising sharply, “I am particularly encouraged to see that the easing in inflation has been driven by falling energy prices.

“The period of elevated inflation now appears to have passed and we are now back on a more stable trajectory.

“This easing in inflation will support an improvement in real wages which should help drive growth in our domestic economy over the remainder of this year.

“However, pockets of inflation remain with core inflation still in excess of 2% and I am acutely aware that many households and businesses are still struggling as price levels throughout the economy remain elevated.

“Despite the strong position of our economy at present we are living in an era of great uncertainty, geopolitical tensions and a changing economic landscape.

“It is against this backdrop that the Government will set out Budget 2025 in early October.

“Budget 2025 will ensure we continue to support families, workers and businesses while also investing in our public services and infrastructure to prepare us for the challenges that we face now and into the future.”

The Central Statistics Office (CSO) also published figures on Thursday that indicated wholesale electricity prices increased by 3% in the month to July and were 15.3% higher than July last year, but were 58.5% lower than in July 2022.

Producer prices for food products dropped by 2.1% in the 12 months to July 2024, while the Food Products, Beverages & Tobacco Index was down by 1.8%.