Bernard Durkan (Kildare North, Fine Gael)
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131. To ask the Minister for Finance the extent to which he remains confident that budgetary measures taken here are adequately focused in order to discourage inflation, self-generated or imported; and if he will make a statement on the matter. [55813/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Consumer price (HICP) inflation picked up sharply over the course of the last year and in October stood at 9.6 per cent. Almost every advanced country in the world is in the same position, with euro area inflation reaching a record 10.7 per cent in October.

The key driver of global inflationary pressures at present is the sharp rise in energy, food and other commodity prices as a result of the war in Ukraine. Spillover effects from higher energy prices are also being felt in other sectors, such as food (via fertilisers and fuel costs) and consumer goods and services (via higher energy inputs). As a result, non-energy inflation has picked up sharply in recent months, indicating broad based inflationary pressures.

While the causes of current price pressures are not within our control, the Government is acutely aware of the impact of rising prices on households and businesses, in particular the increase in fuel and other energy prices. That is why Budget 2023 focused on mitigating inflationary pressures. Budget 2023includes an overall package of €6.9 billion for next year, including adjustments to income tax bands and increases in social welfare and pension rates. Complementing this is a set of one-off measures amounting to €4.1 billion, which take effect from the final quarter of this year. The one-off package includes three €200 electricity credits to each household, an additional social welfare payment, a double payment of child benefit, the extension of the reduction in excise duties and the VAT rate on gas and electricity to end-February as well as the Temporary Business Energy Support Scheme.

This approach balances the need to provide necessary fiscal support to households and firms while at the same time, avoiding a situation in which the Government’s fiscal response becomes part of the inflation problem.