Finance | Price inflation alleviation for consumers
To ask the Minister for Finance the steps that might be taken to alleviate price increases with consequent inflation affecting consumers throughout the country at large; and if he will make a statement on the matter.
Consumer price (HICP) inflation picked up sharply over the course of last year and stood at 9 per cent in August. Almost every advanced economy in the world is in the same position, with euro area inflation reaching a record 9.1 per cent in August.
The key driver of the elevated level of inflation at present is the sharp rise in wholesale energy, food and other commodity prices since the onset of the war in Ukraine. As highlighted in the correspondence, pass-through price effects from higher energy prices are increasingly being felt in other sectors including food (via higher energy inputs). Indeed, the recent rise in non-energy or ‘core’ inflation, which stood at 5.8 per cent in August, suggests inflationary pressures are becoming increasingly broad-based.
The Government recognises the impact this has had on households and businesses across the country, and has taken significant action. Some €2½ billion in cost of living measures have been announced since last October.
The government is committed to tackling the cost of living challenges head on and the forthcoming Budget will set out further supports to help alleviate the inflationary pressures on society. In doing so we must strike a balance between protecting the most vulnerable households and firms from a once-in-a-generation energy price shock, while at the same time ensuring that policy doesn’t added to the inflationary cycle.
However, we must be cognisant that resources are limited and the Government has to balance the appropriate response to the increased cost of living in Ireland with the unprecedented level of global economic uncertainty and macroeconomic risk.
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