Ireland becomes third most expensive EU country

Ireland is now the third most expensive country in the EU for consumer goods and services, the National Competitiveness Council (NCC) revealed today.

The NCC made the revelation as it launched its statement on Prices and Costs. The statement benchmarks Ireland's performance against EU and a selection of other developed countries for the prices of consumer goods and services, wages and a selection of non-pay costs for businesses.

The survey also found Between 2001 and 2002, Ireland overtook the UK and Sweden to become the third most expensive country in the EU for consumer goods and services.

By 2003 Ireland was almost on a par with Finland as the most expensive country within the eurozone, both countries being significantly more expensive than the next group of eurozone countries.

It also revealed the average price of Irish goods and services increased by 22% relative to our trading partners in the four years to May 2004 while consumer price inflation has exceeded the eurozone for the past seven years, the National Competitiveness Council (NCC) revealed today.

Ireland is now the most expensive country in the eurozone for food, non-alcoholic beverages (retail), tobacco and rentals for housing.

Ireland is the second most expensive country in the eurozone for alcoholic beverages (off-licence) and for restaurants and pubs.

The main contributors to Irish inflation in the five years to January 2004 were restaurants and pubs (25% of total inflation over this period), alcohol and tobacco (13%), housing, water and fuels (11%), recreation and culture (11%) and food and non-alcoholic beverages (10%).

"There is considerable evidence to suggest that both business costs and consumer prices in Ireland are now out of line with other advanced economies. Our relative cost position is not justified by economic fundamentals and poses a threat to our continued economic success," said Mr William Burgess, chairman of the NCC.

"Without action, the combination of the recent acceleration in Irish consumer price inflation alongside the growing risk of a sharp decline in the value of the dollar against the euro makes the possibility of a further significant deterioration in Ireland's cost competitiveness all too possible, putting at risk employment and living standards," concluded Mr Burgess.