Inflation

Inflation


Inflation is the steady and persistent rate of change in the level of prices in an economy. The most common measure of inflation is the Consumer Price Index (CPI) which is the overall change in the prices of goods and services that people typically buy over time. In Ireland, the Central Statistics Office (CSO) collects approximately 53,000 prices every month and compares these to the corresponding prices from the previous month in order to construct the CPI.

Short-term Trends


Inflation_May2018

Inflation Rate  (% monthly change)

Source:  CSO – Consumer Price Index

Long-term Trends


The annual average rate of inflation in 2017 was 0.4%.  This compares to a no change for 2016 and a fall of 0.3% for 2015. The largest year-on-year price increase was recorded in April 2017 when prices rose by 0.9%.  The largest price rises were recorded for Restaurants & Hotels (+2.3%), Housing, Water, Electricity, Gas & Other Fuels (+2.1%) and Transport (+2.1%) during 2017. A low inflation rate is one of the reasons why many central banks still keep interest rates low in order to increase economic activity.

Inflation_2017

Inflation Rate  (% annual change)

Source:  CSO – Consumer Price Index