Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Cuirim fáilte roimh an toscaireacht. I welcome Dr. Cassidy and Dr. O'Brien. I thank them for the presentation in terms of the Central Bank's quarterly bulletin. It is really timely. Committees have discussed these matters for many years but this is obviously an issue that is being discussed in every village and town across the State. The first thing on people's lips now is the impact inflation will have on the cost of food, home heating oil and energy, and how people are going to make ends meet. The outline Dr. Cassidy gave is an important contribution to raising awareness about where we are going. However, for many families, it will be very concerning because, just like we have pointed out, the impact of the war in Ukraine has not really been felt yet in terms of prices. Gas prices have been announced by Bord Gáis, for example, and some people think they are the result of the war in the Ukraine but they were not. They are the result of the increase in the price of gas that happened last year and we are going to see significantly further increases. I ask the delegation to elaborate on that matter. The die has already been set for the wholesale price of gas where these operators buy a large proportion, or the majority, of their gas well in advance of consumer use.

The Central Bank mentioned in its quarter 1 bulletin that inflation was projected to be 4.5%. Obviously, those numbers are out of date now even though they are only a couple of weeks old. Where does the Central Bank see inflation for the year 2022?

The Central Bank has done a very important piece of work by breaking down inflation as best as it can for different types of households and different types of income quintiles. I have engaged with the director general of the Central Statistics Office, CSO, to have a better breakdown of inflation because, as we know from the work the Central Bank has done, inflation on the poorest households is about 1% higher than inflation on the most well-off households in the State. Some of that is down to the fact that poorer income households use three times as much of their disposable income on energy than those in the top. I am glad to see the CSO is about to prepare some technical work on this matter, which will be helpful. Can the Central Bank estimate where it sees inflation for different income groups? I ask because we are now looking at not just energy but some of the other staples such as bread as well as fuel, heating and electricity, which are increasing. Given that social welfare rates were increased in the budget by less than 2.5%, what is the real impact on those who depend on a fixed income as a result of the levels of inflation?

My final question on this part is about the second-round effects that could spill into wider inflation in respect of goods and services later in the year. Will Dr. Cassidy go into detail about the interconnectedness with Europe, Russia and Ukraine, as well as the impact second-round effects could have on the State?