Irish inflation is expected to fall faster than previously expected, averaging 4% to 5% across the year, according to Finance Minister Michael McGrath.
(Bloomberg) — Irish inflation is expected to fall faster than previously expected, averaging 4% to 5% across the year, according to Finance Minister Michael McGrath.
“Inflation has now peaked, and is falling back,” McGrath said in a speech late Friday, adding that the outlook may not be as pessimistic as had been originally thought.
Wholesale energy prices have fallen sharply since the budget in September when inflation was expected to average around 7% this year, he said. “Provided there is no further energy price shock, inflation is set to fall much more rapidly than previously assumed and we now believe it will average between 4% and 5% across the year.”
Separately, Irish business group Ibec now forecasts inflation to fall below 4% by the end of 2023, with consumer spending expected to grow 3.5%.
Ireland’s consumer prices fell 0.8% from December to January, while increasing 7.8% from a year earlier, according to the Central Statistics Office.
“The mood music in the economy is much lighter as we enter Spring,” Ibec Chief Economist Gerard Brady said in a quarterly economic outlook published Monday. “Signs across the global economy point to some easing of inflationary pressures, less volatility in wholesale energy prices and signs that global demand is proving resilient despite sharp increases in interest rates.”
Even so, “the year will be without its challenges,” he said. “Ongoing monetary tightening by Central Banks and tightness in energy markets carry risks for both financial stability and the broader economy throughout 2023.”
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