Rose Conway-Walsh (Mayo, Sinn Fein) | Oireachtas source

I thank Dr. Kelly for his opening statement. I want to begin by focusing on the inflation outlook, its causes and its impact.

The quarterly bulletin provides an inflation estimate of 5.4% for this year, 3.2% for next year and 2.3% in 2025. In his opening statement Dr. Kelly said that domestic factors, specifically the interplay between profit margins and wage pressures resulting from labour market tightness, will determine the persistence of inflation. This point is referenced in today's report as well. I want to specifically focus on the relationship between wages and profits. Research by the European Central Bank on 30 March found that in 2022 the effect of profits on domestic price pressures was exceptional from an historical perspective, contributing much more to inflation from April to December than labour costs. The Central Bank's quarterly bulletin at the beginning of the year showed a similar trend in our own economy. In the past year we have heard calls, including from the Government, for wage restraint to tackle inflation but we hear very little mention of profit restraint. I ask Dr. Kelly to comment on the phenomenon and the impact of increased profits on inflation in the recent period. Why are we talking about wages all the time and about keeping wages down? Why is there little talk about profits or why are the huge profits that are being made being excused away?