Irish inflation ticks upwards for the first time this year to 1.9%

On a monthly basis, price levels rose by 0.5%, primarily due further hikes in transport costs

In the past twelve months, transport costs have risen by 7.1%, with signs pointing to even further rises in fuel prices by the end of the year. Issue date: Monday September 5, 2022.

Ireland's annual inflation rate rose slightly in May, marking the first increase in general price levels this year as measured by the harmonised index of consumer prices. 

New figures from the Central Statistics Office (CSO) show Irish inflation increased by 1.9% in the past twelve months, a 0.3% rise compared to the annual 1.6% figure reported in April.

On a monthly basis, price levels rose by 0.5%, primarily due to a 1.5% rise in transport costs following hikes in petrol and diesel as the Government's excise duty was restored. 

In the past twelve months, transport costs have risen by 7.1%, with signs pointing to even further rises in fuel prices by the end of the year.

Energy prices are estimated to have fallen by 0.3% in the month according to the CSO, and have decreased by 3.6% over the 12 months to May 2024. Food prices remained unchanged in the month but rose by 2.3% annually.

Core inflation, which excludes volatile goods such as energy and food, increased by 2.5% since May 2023, a marginal decrease compared to the 2.6% figure reported in twelve months ending in April.

Ireland's harmonised inflation figure of 1.9% remained lower than the eurozone average of 2.4%, with other countries finding it harder to tame rising price levels. 

On Wednesday, Germany reported a second consecutive rise in inflation, underscoring the European Central Bank's (ECB) aim to achieve its 2% target ahead of plans to lower interest rates next week for the first time since it embarked on its aggressive monetary policy campaign in 2022.

Consumer prices rose 2.8% from a year ago in May, which was up from 2.4% in April and above the 2.7% median estimate that economist had been predicting.

In addition, A tax increase on electricity pushed Spain's annual harmonised inflation to 3.8% in May, its highest level since April 2023.

The ECB governing council will meet next week on the 6th of June where it is widely anticipated it will cut its deposit rate by 25 basis points.