Ireland Falls Deeper Into Deflation

Consumer prices in Ireland fell 0.6 percent year-on-year in January of 2015, after declining 0.3 percent in December driven by a drop in energy prices.

In the year, the largest downward contribution came from: transports (-6.6 percent) mainly due to lower petrol and diesel prices and a reduction in the price of motor cars; clothing and footwear (-3.1 percent) due to winter sales; furnishings and household equipment (-2.7 percent) and food and non-alcoholic beverages (-2.4 percent) due to lower prices across a range of products such as vegetables, bread and cereals and meat. 

In contrast, increases were recorded in miscellaneous goods (+2 percent) primarily due to higher motor and health insurance premiums, which were partially offset by reduced rates for the local property tax in certain parts of the country; restaurants and hotels (+1.5 percent) due to higher prices for alcoholic drinks and food consumed in licensed premises, restaurants, cafes etc. and for hotel accommodation and in housing, water, electricity and gas(+1.3 percent) due to higher rents and the introduction of water supply and sewage collection charges, which were partially offset by lower mortgage interest repayments and a decrease in the cost of home heating oil.

In the month, CPI declined by 0.8 percent. The biggest price decreases were reported for: clothing and footwear (-10.2 percent); transport (-3.8 percent); furnishings and household equipment (-2.3 percent).  The only notable upward pressure came from housing, water, electricity and gas (+2.2 percent).

Prices on average, as measured by the EU Harmonised Index of Consumer Prices (HICP), decreased by 0.4% compared with January 2014.

Ireland Falls Deeper Into Deflation

CSO | Carolina Cunha |
2/19/2015 11:49:34 AM