Business

Inflation falls to under 3% in March

Price of package holidays increased almost 40%, and restaurants and hotels by 5.5%

Cost of recreation and culture rose 8.3 per cent over the year to the end of March. Photograph: Niall Carson/PA Wire

Ciara O'Brien
Thu Apr 11 2024 - 11:55

The annual rate of inflation fell to under 3 per cent in March, the fifth month in a row that the rise in the cost of living was under 5 per cent. That compares with an annual rise of 3.4 per cent over the year to the end of February.

But when energy costs and unprocessed food are removed from the calculations, the consumer price index rose 4.1 per cent over the year.

The figures showed a significant rise in the cost of recreation and culture, which increased by 8.3 per cent over the year to the end of March, as the prices of package holidays increased almost 40 per cent, and costs at restaurants and hotels rose 5.5 per cent.

The latter was fuelled by higher prices for alcoholic drinks and food in licensed premises, along with restaurants, cafes and an increase in the cost of hotel accommodation.

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The price of clothing fell, showing a 6.6 per cent decline year on year, while furnishings, household equipment and routine household maintenance fell 0.6 per cent.

On a monthly basis, consumer prices were 0.5 per cent higher compared with February, slowing from the 1 per cent recorded between January and February.

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The largest increases were in transport, where prices rose 2.9 per cent driven mainly by a hike in air fares, and recreation and culture, with a 2.8 per cent rise.

Housing, water, electricity, gas and other fuels saw prices fall 1.8 per cent, and clothing and footwear prices declined 1.8 per cent over the month.

Earlier this month, Irish inflation fell below the European Central Bank’s (ECB) target rate of 2 per cent for the first time in nearly three years, with the flash estimate for the harmonised index of consumer prices (HICP) indicating that prices rose by 1.7 per cent in the 12 months to March.

Daragh Cassidy, spokesman for consumer website Bonkers.ie, said the easing inflation was welcome, but cautioned that prices were still rising, just at a slower pace than last year.

“Many consumers are still feeling the pinch. Very little is getting cheaper. Despite recent drops, gas and electricity prices are still about 80-90 per cent above what would, until recently, have been considered normal levels, while food costs have increased by about 20-25 per cent over the past 2½ years,” he said.

“We’ve also seen big hikes in health insurance costs over the past year. So it could easily take another two or three years for consumers to regain the purchasing power that they lost since the cost-of-living crisis began.”

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist

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