Annual inflation in Irish economy remains muted at 0.4%

Inflationary pressures in the Irish economy remain muted, with latest figures showing that consumer prices were just 0.4 per cent higher on an annual basis in December. Prices actually fell during the month, driven by heavy discounting by retailers in the run-up to Christmas.

According to the latest consumer price index for December 2017, published by the Central Statistics Office on Tuesday, prices were 0.4 per cent higher when compared with December 2016. This compares with no change for 2016 and a fall of 0.3 per cent for 2015.

Increases in energy prices and rents drove prices marginally higher, as the most notable changes in the year were increases in housing, water, electricity, gas and other fuels (3.6 per cent), restaurants and hotels (2.5 per cent), education (1.6 per cent) and transport (1.3 per cent).

On the other hand, the cost of clothing and footwear (-3.9 per cent), furnishings, household equipment and routine household maintenance (-3.7 per cent), recreation and culture (-1.9 per cent) and food and non-alcoholic beverages (-1.5 per cent) all declined.

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On a monthly basis, however, prices fell, down by 0.1 per cent, driven by discounting in clothes and footwear (-1.8 per cent) food (-0.7 per cent) and alcohol and tobacco (-0.7 per cent).