Consumer prices slow to 1.9%

Thu, May 10, 2012, 01:00

Consumer prices rose by 1.9 per cent in the year to the end of April, according to new figures from the Central Statistics Office (CSO).

The CSO said that consumer prices in April were unchanged in the month compared to a 0.4 per cent rise between March and April 2011.

Consumer prices were lower than in March when the annual rate of inflation went up to 2.2 per cent on the back of higher fuel prices.

The annual price rises were fuelled by a 9.4 per cent rise in the cost of education, while transport costs increased by 5.7 per cent. Miscellaneous goods and services increased by 4.1 per cent over the year and alcoholic beverages and tobacco prices rose by 3.2 per cent.

During the year to the end of April 2012, there was a 2.3 per cent decline in the cost of furnishings, household equipment and routine household maintenance. Prices for goods and services in the recreation and culture segment fell by 1.1 per cent while clothing and footwear was down by 0.4 per cent.

On a monthly basis, the cost of miscellaneous goods and services increased by 1.3 per cent while food and non-alcoholic beverages rose by 0.5 per cent. Over the same period there was a 0.9 per cent decrease in the cost of alcoholic beverages and tobacco and a 0.7 per cent decline in transport prices.

The monthly rise in miscellaneous good and services was largely attributed to the introduction of the household charge and an increase in health insurance premiums.

The annual rate of inflation for Services was 2.1 per cent in the year to April, while Goods increased by 1.5 per cent.

Services, excluding mortgage interest repayments, rose by 2.7 per cent over the 12 month period.

The Consumer Price Index (CPI) excluding tobacco for April remained unchanged in the month and was up by 1.7 per cent in the year.

The CPI excluding energy products was down by 0.2 per cent on a monthly basis and rose by 0.9 per cent on an annual basis. The CPI excluding mortgage interest remained unchanged in the month and rose by 2.1 per cent in the year.

Davy Stockbrokers described the falling inflation rate as a "welcome development for Irish consumers" but warned that it was also a sign of continued weakness in the domestic economy.

Goodbody said Government policy was driving domestic inflation with measures aimed at reducing the deficit having an upward effect on prices.

However, it added that it expected some of the Government-driven inflationary pressure to be offset by moderating energy prices in the coming months.

Lobby group Isme claimed the latest figures mask rising business costs and called on the Government to take action to restore national competitiveness.

"The sad fact is that, as businesses cut their prices to compete, increased State influenced costs, including energy, transport, local charges, water and waste charges continue to undermine our competitiveness, which is crucial to any economic revival," said Isme chief executive Mark Fielding.

“It is now imperative that Government reciprocates, by immediately implementing a root and branch review of the State’s influence on the costs to business and addresses these through cost reductions and greater efficiencies," he added.