Bernard Durkan (Kildare North, Fine Gael)
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Question 125: To ask the Minister for Enterprise, Trade and Employment the main cause or causes for the hidden inflation resulting in the relocation of jobs here to more competitive economies; and if he will make a statement on the matter. [4428/08]

Micheál Martin (Cork South Central, Fianna Fail)
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The Consumer Price Index (CPI) was 4.9% on average in 2007. The euro area measure of inflation, the Harmonised Index of Consumer Prices (HICP), was 2.8% for Ireland in 2007. This was lower than the euro area average for the same period. The Central Bank, in their Quarterly Bulletin published last week, forecast inflation (HICP) to ease further to 2.5% in 2008. Inflation is measured by independent authorities in a public and transparent manner.

We have no control over some of the factors influencing inflation, such as oil prices, the exchange rate and mortgage interest rates. The overall cost environment is an important factor important for business and investment decisions. This is why, as part of our economic policy, we seek to maintain low inflation, promote competition, pursue a sensible incomes policy, and keep public spending growth at sustainable levels. Doing this will allow us to keep the burden of taxation low, thus helping to maintain competitiveness and to maximise our economic potential. These are all part of our strategy to improve the cost environment and to enhance competitiveness. Furthermore, the Government's last three budgets have been non inflationary as a measure to help the cost environment for business.

However, business decisions to move jobs or production to other locations are based on many factors and not just cost alone. Proximity to markets, consumer preferences and changes in technology are some of the factors which may influence location decisions of mobile investment.