Irish Examiner view: Ireland is vulnerable to the paradox of thrift

Tightening our belts during high inflation makes sense, but it could contribute to a downward spiral for our economy

Cutting costs — perfectly sensible at any time, and essential during a period of high inflation — can have quite grisly consequences on the economy when we all do it, all at once. Stock picture

Taoiseach Micheál Martin is correct to state that our Government “cannot react on a weekly basis” to rising prices and costs. But that is exactly what consumers, most of whom are also voters, will be forced to do by the end of this year and probably beyond.

Irish manufacturing has experienced the sharpest rise in input prices since figures started to be collected 24 years ago. And while there has been a significant rise in orders, this is because customers are trying to buy forward to beat the next wave of increases. In other words, it is an unrepeatable phenomenon.