Economic downturn - Full attention is required

The annual rate of inflation increased to 4.7%, according to figures published yesterday by the Central Statistics Office. This was up on the 4.3% last month.

Nobody is likely to be surprised in view of recent increases in food and fuel prices. Diesel costs have gone up by 23%, which has added to the cost of transportation. The increase in the Consumer Price Index doubled to 0.8% in May from 0.4% in April. The cost of food has increased by 8% during the past 12 months.

Retail sales figures have dropped very sharply since last October. The latest figures show a fall of 3.2%, which is the largest drop for five years. As a result government tax receipts are well down. The intake from Value Added Tax is down by 8% on what had been anticipated.