Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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136. To ask the Minister for Finance if he will review matters raised in correspondence (details supplied) ahead of Budget 2023; if he will address these concerns; and if he will make a statement on the matter. [47302/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Consumer price (HICP) inflation has picked up sharply over the course of this year and stood at 9 per cent in August. Almost every advanced economy in the world is in the same position, with inflation rates of 8.3 and 9.1 per cent recorded in the US and euro area respectively in August.

The key driver of the elevated level of inflation at present is the sharp rise in wholesale energy, food and other commodity prices since the onset of the war in Ukraine. However, as highlighted in the correspondence, pass-through price effects from higher energy prices are increasingly being felt in other sectors. Indeed, non-energy or ‘core’ inflation has picked up sharply in recent months and stood at 6.2 per cent in August, suggesting inflationary pressures are increasingly broad based.

The Government recognises the impact rising prices have had on households and businesses across the country and has taken significant action. Some €2.4 billion in cost of living measures has been announced since last October. Looking ahead, the Government will continue to address these challenges head on. Budget 2023 will be a ‘Cost of Living Budget’ and will build on the fiscal supports the Government has already provided to cushion the impact of rising prices.

The Government supported households and firms through the pandemic and will continue to do so in the face of unprecedented energy price spikes caused by Putin’s war. However, we must be cognisant that resources are limited and while government policy will absorb some of the price shock, we cannot cushion households and businesses from the entire impact. The Government has to balance the appropriate response to the increased cost of living in Ireland with the unprecedented level of global economic uncertainty and macroeconomic risk. Furthermore, in calibrating how we respond to the current challenges, it is important that we strike the right balance and ensure that policy doesn’t inadvertently add further inflationary pressures into the system.