Written answers
Thursday, 17 June 2010
Department of Finance
Price Inflation
5:00 pm
Eamon Gilmore (Dún Laoghaire, Labour)
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Question 78: To ask the Minister for Finance his views on the return of inflation on a month-by-month basis under both the consumer price index and the harmonised index of customer prices measures in the first five months of 2010; and if he will make a statement on the matter. [25617/10]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputy is correct to note that both the consumer price index (CPI) as well as the harmonised European measure (HICP) have risen since January of this year. Much of this effect is seasonal. Consumer prices almost always rebound in February and March after the January sales. The CPI has risen by more than the HICP, mainly due to the rise in market mortgage interest rates after the exceptionally low levels of 2009.
On a year-on-year basis the CPI has fallen by 1.1 per cent in the twelve months to May, while the HICP fell by 1.9 per cent over the same period. The declines are very broad-based, with falls recorded across 9 of the 12 main CPI sub groups. This is helping to bring about a welcome improvement in Irish competitiveness at this time.
At Budget time last December my Department forecast that a further modest fall in consumer prices was likely this year, followed by low, but positive, inflation in 2011 and in following years. The data in the year so far support these projections.
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