Oireachtas Joint and Select Committees
Wednesday, 25 January 2023
Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach
Economic Issues: Engagement with Governor of the Central Bank of Ireland
Peadar Tóibín (Meath West, Aontú) | Oireachtas source
That is interesting because it is contrary to the political narrative in the State. The other issue I want to briefly touch on is one that is seldom discussed. Has any analysis been done by the Central Bank on the effect Covid restrictions had on interest rates? Obviously, we had a real illness and at times the Government had to deal with that and protect people with restrictions. However, Ireland had a significantly longer restriction period than any other European country. The Covid restrictions added significantly to the reduction in the aggregate supply of goods, which led to inflation. We also saw a quick rebound in demand after Covid because of pent up purchasing power. Significantly, monetary policy was then increased during that period. Is it fair to say that the Covid experience has been a significant element in those three capacities on the inflation rate we are experiencing?
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