Further measures will be required in the Budget, if not before, to tackle the soaring cost of living due to inflation, an Oireachtas Committee has found.
The Select Committee on Budgetary Oversight has published its report on Inflation in which it makes a series of recommendations and observations.
It warns that high inflation could lead to pressure on government expenditure.
Committee chair Neasa Hourigan said that for the first time since the financial crisis, higher inflation has become an issue of significant concern for individuals and households.
The committee met stakeholders in November 2021 and heard that inflation has been driven by three main factors: energy costs, supply chain issues and base effects.
"Due to the source of the inflationary pressures, those on lower and fixed incomes are most impacted, particularly due to energy cost rises, and are the least able to absorb the additional costs," she said.
However, she said that the work was undertaken before the Russian attack on Urkraine and this will have further consequences on inflation levels within the EU and globally, though the extent and timeframe of these impacts remains unclear.
The committee also noted that the current drivers of inflation are primarily global in nature and some are outside Ireland’s control.
The report highlighted concerns that the geo-political situation and high international demand could have a significant negative impact on future energy prices and that this may place a corresponding pressure on households and individuals. As such, the committee is of the view that the State needs to make considerable investments in state-owned renewable sources to protect future energy security.