Bernard Durkan (Kildare North, Fine Gael)
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247. To ask the Minister for Finance if he remains confident that inflationary forces remain within the manageability of the economy; if indicators exist that such inflationary tendencies are likely to level off as predicted; and if he will make a statement on the matter. [29076/24]

Bernard Durkan (Kildare North, Fine Gael)
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254. To ask the Minister for Finance if he has identified particular steps needed to check inflation in the future; and if he will make a statement on the matter. [29083/24]

Jack Chambers (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 247 and 254 together.

The high inflation rate environment over recent years has been extremely challenging for households who had to endure an erosion of their purchasing power as a result. However enormous progress has been made over the last year or so in reducing inflation with headline HICP inflation of just 1.5 per cent in June. This is the lowest rate since April 2021 and is consistent with price stability.

Key to this moderation has been the partial reversal of energy prices from extremely high levels. Consumer energy prices in June are estimated to have decreased by 5.6 per cent compared to June last year. This decline captures the fall in wholesale energy prices being passed through to retail gas and electricity bills. I expect further cuts to take place throughout this year as this process continues.

However, I am conscious that pockets of inflationary pressure still remain, particularly in domestic sectors, especially for certain services. In part, this is due to capacity constraints in the economy. The labour market is essentially at full-employment and supply-demand imbalances are evident in a number sectors. These indicators – amongst others - will be important to monitor as measures of inflationary tendencies moving forward.

Throughout this period of high inflation, the Government has been at the forefront in supporting the most vulnerable. By responding swiftly and decisively to the cost of living challenges, the Government has helped to mitigate the impact of inflationary pressures on both businesses and households. The temporary and targeted nature of the steps taken by Government have been designed to avoid adding to the inflationary burden whilst providing support to those most in need. It is clear that we have been successful in this regard.

Looking forward, I expect the moderation in inflation to improve households’ purchasing power and support increased consumer spending over the year.