The release of pent-up demand and a rebound in commodity prices, especially in the energy sector, have caused inflation to surge this year

Budget 2022 was framed against a backdrop of a strongly recovering economy and rapidly improving public finances as Ireland emerges from the grips of the Covid-19 pandemic, though the virus is still very much with us.

Base effects alone are going to see the inflation rate rise further in the next couple of months

The key factor behind the upward pressure on prices is the ongoing shortfall in supply

The slowing pace of recovery is giving pause for thought as US Federal Reserve offers no sign of scaling back quantitative easing

There are clear signs that the Delta variant has slowed the pace of recovery and halted earlier momentum

ECB rates are not expected to start to be raised until 2024, while in the US, Fed hikes are not expected until early 2023

The Economic and Social Research Institute, in its quarterly economic commentary published in June, argued the case for increased government capital spending in the present very low interest rate environment.

The economy is growing strongly, and output is back to its pre-pandemic levels

The economy started to emerge from lockdown in April and all the signs are of an exceptionally strong rebound in domestic activity since then