Consumer prices falling by 1.5% as pandemic hits retail sector

Consumer prices were on average 1.5 per cent lower in October compared with the same month last year as the cost of communications, transport, clothing and footwear all fell.

The negative price growth marks a change from a year ago when prices were rising at an annual rate of 1 per cent.

The imposition of restrictions to suppress the Covid-19 virus has curtailed consumer activity and turned inflation into deflation.

The latest consumer price index (CPI) from the Central Statistics Office (CSO) suggests the most notable changes in the year were decreases in communications, which includes phone charges (-7.9 per cent), transport (-4.3 per cent), clothing and footwear (-4.4 per cent) and household furnishings and equipment (-4 per cent).

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Falling oil prices contributed to a fall in the cost of transport. Within this category, diesel and petrol prices were down 7.7 per cent and 5.9 per cent in annual terms.

The divisions which caused the largest downward contribution to the CPI in the year were transport and housing, water, electricity, gas and other fuels, and communications.

The figures show there were price increases in health (+4.2 per cent), alcoholic beverages and tobacco (+0.8 per cent), recreation and culture (+0.7 per cent) and restaurants and hotels (+0.1 per cent).