Headline inflation in the Irish economy jumped 2.2 per cent in April as the price of food and alcohol continued to rise, the Central Statistics Office (CSO) said on Thursday.
It means prices were on average 2.2 per cent higher in April than the same month last year, up from 2 per cent in the 12 months to the end of March.
The CSO data underlines the challenge to consumers at present. Staples such as a pound of butter is up 97c in the past year, while a kilo of Irish cheddar cheese is up 79c. Two litres of full fat milk is 27c more expensive now than a year ago.
Prices linked to restaurants and hotels, which were up 3.3 per cent over the 12 months, made the largest contribution to inflation in the Republic’s economy, the CSO said, chiefly because of higher prices for food and drink consumed in licensed premises and similar businesses.
However, the price of hotel accommodation declined by a modest 0.2 per cent over the 12-month period, partially offsetting the overall increase in restaurant and hotel prices.
Recreation and culture-related prices, meanwhile, saw the biggest annual jump in April, rising 4.2 per cent.
Package holiday prices increased by 10.1 per cent on an annual basis, coinciding with the Easter holiday in April and the run-up to the May Bank Holiday.
“Irish consumers have been loosening the purse strings this April, with celebrations like Easter and St Patrick’s Day boosting food and alcohol sales, said Robert Purdue, head of dealing at global financial services company Ebury Ireland.
“Warmer weather and school holidays have also encouraged more spending on leisure activities.”
However, he said the general increase in inflation, which has now jumped in two consecutive months, will be closely watched by economists against the backdrop of the Trump administration’s tariff threats.
He said: “Key Irish industries, such as pharma, are still very much in the firing line of US president Trump’s tariff ambitions, however, and while the euro has gone from strength to strength since Trump’s ‘Liberation Day’ trade policy announcement, the inflationary benefits of this may not outweigh the price rises that could come from more expensive imports.”
Thomas Pugh, an economist with consulting firm RSM Ireland, said risks are weighted towards inflation accelerating further as a consequence of rising trade tensions and new tariff announcements.
“The big question is to what degree the imposition of US tariffs on the EU and, more importantly, the surge in associated uncertainty, weighs on demand and opens up a little more slack in the labour market in Ireland,” he said.
“Even though pharmaceuticals haven’t been targeted yet, the Irish economy looks especially vulnerable to US tariffs.”
Meanwhile, the CSO said transport prices, which were up 1.8 per cent over the 12 months to April, were down slightly from March, largely due to falling diesel and petrol prices as crude oil prices continue to drop on global markets.
Prices linked to housing and household utilities increased 2.2 per cent in April from the same month last year, largely due to a 5.4 per cent climb in rents over the period.
