Irish Economy 2014: Prices on average, as
measured by the CPI (consumer price index), were 0.3% higher in July compared
with July 2013 - - the CSO said Thursday that the most notable changes in the
year were increases in Education (+4.5%), Alcoholic Beverages & Tobacco (+3.7%),
Miscellaneous Goods & Services (+2.8%) and Restaurants & Hotels (+2.5%). There
were decreases in Communications (-5.1%), Clothing & Footwear (-3.6%),
Furnishings, Household Equipment & Routine Household Maintenance (-3.3%) and
Food & Non-Alcoholic Beverages (-3.0%).
Consumer Prices in July, as measured by the CPI,
decreased by 0.2% in the month. This compares to a decrease of 0.1% recorded in
July of last year. The most significant monthly price changes were decreases in
Clothing & Footwear (-7.0%), Miscellaneous Goods & Services (-1.1%) and
Furnishings, Household Equipment & Routine Household Maintenance (-1.1%). There
were increases in Transport (+1.8%), Restaurants & Hotels (+0.5%) and Alcoholic
Beverages and Tobacco (+0.4%).
The sectors which caused the largest upward
contribution to the CPI in the year were Restaurants & Hotels (+0.39%),
Miscellaneous Goods & Services (+0.34%) and Alcoholic Beverages & Tobacco
The divisions which caused the largest downward
contribution to the CPI in the year were Food & Non-Alcoholic Beverages
(-0.36%), Furnishings, Household Equipment & Routine Household Maintenance
(-0.16%) and Communications (-0.16%).
The main factors contributing
to the annual change were as follows:
- Restaurants & Hotels increased mainly due to
higher prices for alcoholic drinks, hotel accommodation and food consumed in
licensed premises, restaurants, cafes, canteens etc;
- Miscellaneous Goods & Services rose
primarily due to higher health and motor insurance premiums and the
increased costs associated with the local property tax;
- Alcoholic Beverages & Tobacco increased due
to higher prices for alcohol sold in off licences and supermarkets and
higher tobacco prices;
- Food & Non-Alcoholic Beverages decreased due
to lower prices across a range of products such as vegetables, meat, bread
- Furnishings, Household Equipment & Routine
Household Maintenance fell mainly due to the reduced cost of furniture and
furnishings, household textiles and non-durable household goods e.g. washing
- Communications decreased mainly due to
decreases in the cost of telephone and telefax equipment and telephone and
economist at Davy, commented: "Inflation
remained at weak levels in July. Consumer prices were up 0.3% on the year, down
from 0.4% in June. Over the month, prices were down 0.2%. The HICP measure of
annual inflation, which is used to compare prices across the EU, remained
unchanged over the month at 0.5%.
While mortgage interest continued to act as a drag on inflation, down 9.3% in
the year to July, services price inflation also eased to 3.2% yoy from 3.3% in
June, while goods price deflation accelerated to -1.9% from -1.7%. Nonetheless,
energy price inflation picked up to 0.8% yoy from 0.4%, impacted by recent
higher oil prices.
With current low interest rates and import prices, the outlook for inflation
remains weak. Nevertheless, a weaker euro may begin to put upward pressure on
import prices in the second half of the year. Moreover, the recovery in the
economy may soon exert some modest price pressures on domestic inflation.
However, we expect inflation to remain well below 1% this year."