Central Bank sees 'damaging wage rises' as main risk to robust recovery

The Central Bank sees average wages increasing 3.25% this year, rising by 4.25% in 2023, and then growing by 5%. It notes Irish inflation is also being driven by surging house rental costs. File photo: RollingNews.ie
Economic activity and unemployment are returning rapidly to pre-crisis levels but stubbornly high inflation could yet hit the living standards of many of the lowest income households – even as wage increases take off, the Central Bank has said.
The bank’s latest quarterly outlook is its most upbeat since the start of the Covid-19 crisis almost two years ago, and confirms the Irish economy is among the fastest growing in Europe, with government finances in “remarkably” good health despite the huge public costs entailed in fighting the fallout of the pandemic.