Róisín Shortall (Dublin North West, Labour)
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Question 202: To ask the Minister for Finance the aggregate expected inflationary impact of the VAT and excise measures introduced in budget 2009; and if he will make a statement on the matter. [38830/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is estimated that the VAT and excise measures introduced in Budget 2009 will add approximately 0.7 percentage points to CPI inflation in a full year. Notwithstanding these measures, inflation is expected to moderate in 2009 and beyond.

The Government's Budget Day forecasts show that CPI inflation is expected to average 21⁄2% in 2009 (on the usual technical assumption of no further changes in interest rates), down from an estimated average of 41⁄2% this year. On a harmonised basis, inflation is expected to average 1.9% over the period 2009-2011, in line with the European Central Bank's target. This easing in inflationary pressures is a welcome development at this time.