John Perry (Sligo-Leitrim, Fine Gael)
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Question 139: To ask the Minister for Finance his plans regarding the International Monetary Fund's assessment of the economy where inflation reached a two-year high, and where the rate in Government-controlled sectors rose six times as fast again, and where, in education, health and household services, the inflation rate in the past 12 months has been 2.5 times higher than in the rest of the EU; his plans to redress this matter; and if he will make a statement on the matter. [31126/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I welcome the IMF assessment of the Irish economy's performance and prospects. I am pleased that the IMF has commented favourably on the continuing impressive performance of Ireland's economy, which it states is based on maintaining sound economic policies.

Our inflation rate is broadly in line with that in the EU, contrary to what the Deputy says. It is 2.8% compared to 2.5% on the harmonised basis for September 2005. The recent increase in inflation is due to the spike in oil prices and has little to do with Government action. Since January 1997, tax-induced inflation has been a relatively small element, amounting to around 5.5 percentage points out of a 33.8% total increase as measured by the CSO constant tax price index.

As the Deputy conveniently forgets, I made no changes to indirect taxes in the last budget. This decision played a significant role in keeping consumer price inflation at the low level we had successfully brought it down to in 2004.