Inflation drops below 2% for first time in three years

Prices in the transport sector rose 4%, primarily due to higher prices for airfares, petrol, diesel and motor cars.

Ireland's official measure of inflation has fallen below 2% for the first time in over three years.

According to the Consumer Price Index from the CSO published on Thursday, prices have risen by 1.7% over the past year, with inflation dropping sharply from the 2.2% annual rise recorded in July.

Ireland's official measure of inflation fell below 2.0% in August for the first time in over three yearshttps://t.co/97JEbSfrVD#CSOIreland #Ireland #CPI #ConsumerPrices #Inflation #Deflation #Prices #BusinessStatistics #Business #BusinessNews #IrishBusiness pic.twitter.com/f2iEYdAxOV

— Central Statistics Office Ireland (@CSOIreland) September 12, 2024

The sectors with the largest decrease in prices were clothing and footwear down 6.2% due to lower prices for garments, and shoes and other footwear. Housing, water, electricity, gas and other fuels dropped 1.9%, which the CSO said was due to a reduction in the price of electricity, gas, home heating oil and coal. 

However, this decrease was partially offset by an increase in the cost of mortgage interest repayments and rents.

The sectors that saw the largest price increases were restaurants and hotels, up 4.5% due to higher prices for alcoholic drinks and food consumed in bars, restaurants and cafes. 

This was followed by the miscellaneous goods and services sector, where prices rose by 4.1%, mainly due to higher premiums for health and motor insurance and an increase in prices in hairdressing salons and personal grooming establishments. 

This increase was partially offset by lower prices for appliances, articles and products for personal care, and jewellery, clocks and watches.

Prices in the transport sector rose 4%, primarily due to higher prices for airfares, petrol, diesel and motor cars.

"Prices for consumer goods and services in August 2024 rose by 1.7% on average when compared with August 2023. This is the first time since June 2021 that the CPI, Ireland's official measure of inflation, has been below 2%," Anthony Dawson, statistician in the Prices Division said.

For specific items, the CSO reported the price of a pound of butter had risen 17c and a 2.5kg bag of potatoes was up 59c, while there were decreases in the price of Irish cheddar cheese per kilo, down 11c, and an 800g loaf of white sliced pan fell 4c.