Ireland is set to overtake Finland as the most expensive country in the euro zone this year, according to a new price survey.
The Forfás consumer pricing report published today says Irish prices are already 12 per cent higher than the euro zone average.
It reports that soaring prices in domestic services were the most important driver of national inflation, with more expensive Government services also playing a part.
Pubs and restaurants alone accounted for nearly 30 per cent of the increase in consumer prices. Combined with alcoholic beverages and tobacco (19 per cent), transport (16 per cent), and miscellaneous goods & services (15 per cent), these domestic sectors accounted for 80 per cent of national inflation in 2002, the report states.
Ireland was the most expensive country in the euro zone for food from low-priced outlets in 2002, the second-most expensive for food from mid-priced outlets and the third most expensive for food from high-priced retail outlets.
Ireland was also found to be the second most expensive country in which to buy non-food consumables in the euro zone across all retail types.
According to National Competitiveness Council (NCC) chairman, Mr William Burgess, reducing inflation and improving Ireland's competitiveness should become the immediate economic priority for the Government and Social Partners.
The NCC recommends that the Government and social partners should lower public expectations of future inflation by committing itself to a credible inflation target.
Other recommendations to Government contained within the statement focus on the role of fiscal policy, competition policy, better regulation and improving access to the Irish market for foreign service providers.