Irish prices fall most in eurozone

CONSUMER prices in Ireland dropped by more than in any other eurozone country last month.

Based on a European measure which excludes mortgage interest relief, prices in Ireland fell by 2.6% in July, compared with 1.7% in Belgium, which saw the second-biggest drop.

Across the eurozone, consumer prices fell the most in at least 13 years, reducing the likelihood of interest rates rising any time soon.

Prices in the euro region slid 0.7% from a year earlier, according to the European Union statistics.

The negative figures are mainly due to high energy and food prices last year, a European Commission spokesman said.

“The energy and food prices were very high in July last year compared to July this year,” he said.

The figures show a 5.5% decline in transport costs, related to lower year-on-year energy prices.

A year ago, oil prices were trading at an all-time high of around $147 a barrel, compared with the July average rate of around $65.

The only members of the eurozone to post rising prices in the year to July were Greece, Malta, Slovakia and Finland.

Germany, the eurozone’s largest economy which this week exited the recession, saw prices fall by 0.7% in the year to July.

The figures are unlikely to cause much concern at the European Central Bank, however, as it has predicted a short period of negative inflation. Analysts also noted that the downward pressure coming from oil prices will disappear in the months ahead as last year’s sharp increases drop out of the annual comparison.

But they warned that the stuttering eurozone economy may continue to keep prices weak despite surprise figures earlier this week showing the recession in Germany and France ended in the second quarter.

Most economists expected that eurozone inflation would dip briefly into negative territory but they have ruled out a longer downward spiral in prices like the one during Japan’s “lost decade” in the 1990s.

Earlier this week figures from the Central Statistics Office showed prices in Ireland, which include mortgage interest relief, fell 5.9% in July.

Traffic at 3 main airports declines

By Niamh Hennessy

TRAFFIC at the country’s three largest airports nose-dived last month highlighting the “rotten state of commercial aviation” in Ireland.

Aircraft traffic in Dublin airport in July fell 17.2% while volume contracted 24% in Cork and 23% at Shannon, according to figures released by the Irish Aviation Authority (IAA).

Traffic has been plunging every month at the country’s airports. Traffic was down 24% in May in Shannon and 22% in June.

Dublin, which accounts for 53% of Irish volume, saw traffic falls of 14% in April, 16% in May and 19% in June.

The IAA said the impact of the global downturn on the aviation industry continues to be felt with no sign of an upturn.

Commercial air traffic movements at the three airports were down on July 2008 by 16% in Dublin, 18% in Shannon and 20% in Cork.

Bloxham economist Joe Gill said Cork and Shannon airports might as well be renamed as “tumbleweed terminals”.

“This snowstorm of data is presented in an effort to flash large red strobe lights in front of those who think Irish policymakers are managing the crisis well.

“New per passenger taxes were introduced last Spring. Higher airport charges are planned by 2010. Airlines are voting with their feet,” he said.

“Ireland used to have an enlightened aviation strategy, spurred on and supported by thinkers like Peter Sutherland, Des O’Malley and Tony Ryan. There is little sign of such talent now,” he added.

Airlines have been lobbying for the Government to abolish the €10 travel tax it announced last year.