Inflation leaves Irish prices highest in eurozone

Ireland is expected to become the most expensive country in the 12-nation eurozone this year, according to a report by Forfas, the Government's enterprise policy advisory board.

The Forfas consumer pricing report for 2003 said prices in Ireland are now 12% above the EU average due to high inflation over the past five years.

Last year, Ireland was rated the second most expensive country in the eurozone - just marginally behind Finland - but Forfas said Ireland is likely to top the list at the end of this year.

The advisory body said the main factors driving inflation were increased charges in pubs and restaurants and price increases for goods and services under some level of Government control.

Responding to the report, the National Competitiveness Council said reducing inflation should become an immediate economic priority for the Government and the social partners.

Council chairman William Burgess said: "The continuing overshoot in consumer price levels and inflation is seriously hampering efforts to improve competitiveness. It is vital that swift action is taken to resolve this inflation problem which is made even more critical by the weak global economic environment and the recent strong appreciation of the euro against sterling and the dollar."

Mr Burgess said further price increases would put Ireland's competitiveness under pressure and leave jobs at risk.