Consumer prices falling by 1.1% as pandemic hits retail

Falls in the cost of clothing, household furnishings, transport and communications kept Irish inflation in negative territory last month.

The latest consumer price index (CPI) shows the average basket of goods was 1.1 per cent cheaper in November than it had been in November 2019. The negative price growth marks a change from 12 months ago when prices were rising at an annual rate of 1 per cent.

The imposition of restrictions to curb the spread of the Covid-19 virus has dampened consumer activity and turned inflation into deflation.

The CPI for November suggests the most notable changes in the year were decreases in the cost of clothing and footwear (-7.9 per cent), household furnishings and equipment (-3.7 per cent), transport (-3 per cent) and communications, which includes phone charges (-2.5 per cent).

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Clothing and footwear fell due to sales, the Central Statistics Office said, while transport decreased primarily due to a reduction in air fares and lower prices for diesel and petrol. But this was partially offset by higher car prices.

The figures show there were increases in the cost of healthcare (4 per cent), alcoholic beverages and tobacco (1.1 per cent) and restaurants and hotels (0.8 per cent).

Health rose mainly due to an increase in the cost of medical and dental services.