Peadar Tóibín (Meath West, Aontú)
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244. To ask the Minister for Finance if it has been brought to his attention that Irish grocery price inflation hit a new record of 16.3% in February 2023. [9819/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Over the past year, Ireland has experienced a broad-based and decades-high surge in inflationary pressures. The key driver of these pressures has been Russia’s war in Ukraine and Putin’s weaponisation of gas supplies. This has driven a sharp rise in energy prices across the world economy with Europe at the epicentre of the energy price shock. Spillover effects from higher energy prices have also been felt in other sectors such as food (via higher fuel and fertiliser costs) and consumer goods (via higher energy inputs), with non-energy or ‘core’ inflation also picking up over the course of last year.

Consumer price (HICP) inflation peaked at around 9½ per cent in Ireland last summer and averaged just over 8 per cent over the course of the year. These levels of inflation have not been seen in many decades, with an average annual rate of inflation of around ½ per cent recorded across the previous ten years. Almost every advanced economy is in a similar position, with euro area inflation reaching an average of just under 8 ½ per cent last year.

Incoming data suggest that inflation has begun to moderate in recent months. The prices of oil and non-energy commodities have retreated from the highs reached in the immediate aftermath of Russia’s invasion of Ukraine. The easing in wholesale energy and commodity markets over the past months supports the idea that inflation has now peaked and is on a downward trajectory. While inflation in Ireland remained elevated at 8 per cent in February, this marks a decline of around 1.5 percentage points from last summer’s peak.

Notably, according to the CSO’s Consumer Price Inflation release for February, food and non-alcoholic beverages prices were up 13.4 per cent on an annual basis and up 1.2 per cent on a monthly basis. This represents the highest annual rate on record and reflects the continued inflationary pressures faced by households.

Government has responded swiftly and decisively to the cost of living challenge to date. Budget 2023 was a cost of living budget focused on progressive and targeted measures to ease the impact of inflation without adding further inflationary pressures in the economy. Over recent weeks the Government has announced further cost of living supports amounting to around €1.3 billion, including a range of taxation and expenditure measures.

My department continues to closely monitor inflationary developments on a regular basis and will publish updated inflation forecasts alongside the Stability Programme Update in April.