The Russian invasion of Ukraine is not expected to result in food shortages in Ireland in the coming months but the Government is anticipating price increases.
Tánaiste Leo Varadkar said it probably will be the case that there might be higher food prices and some products may not be available but shortages are "not modelled, predicted or expected".
He also said the Government is not expecting fuel shortages and but that further action to help people with the high cost of energy would have to be at a European level.
It comes as inflation in the Irish economy is expected to surge to 8.5 per cent or even higher in the coming months.
In the Dáil, Sinn Féin leader Mary Lou McDonald said the Government could not stand “idly by while people are pushed into poverty”.
She said the Government had “elbow room” within public finances to intervene and “cushion people” from the cost of living crisis.
Ms McDonald was speaking during Leader’s Questions in the Dáil on Wednesday, and pointed to the latest Economic and Social Research Institute’s (ESRI) quarterly forecast which says inflation in the Irish economy was expected to surge to 8.5 per cent or even higher in the coming months.
The Sinn Féin leader again called on the Government to engage with the European Commission and to remove VAT on energy bills for at least a period of three months and for excise duty on home heating oil to be removed.
In response, Minister for Public Expenditure and Reform Michael McGrath said all developing economies around the world were experiencing a high level of inflation, pointing to the UK where it stood at 6.2 per cent and to the US where it was just under 8 per cent.
“These are unprecedented times and the level of inflation that we are witnessing and that people are having to deal with in their day to day lives is without parallel in recent modern history,” he said.
Mr McGrath said the Government was “not standing idly by” and was not “an observer or commentator”, pointing to its recent package of measures. He said the Government had made a “genuine and concerted effort” to tackle the cost of living it would keep the issue under review.
Speaking at a press conference in Dublin, Mr Varadkar highlighted the €1 billion set aside by Government to help with the cost of living including the increase in the fuel allowance, €200 deduction from the electricity bills and cut in excise on petrol and diesel.
‘Significant interventions’
Mr Varadkar said: “These are very significant interventions but the truth is, all we can do as a government is ease the pain and mitigate the effect of rising prices. “The underlying factors that are driving it unfortunately are international and are largely beyond our control.”
Asked if a VAT cut could happen Mr Varadkar said: “I think any further actions like reduction in VAT would have to be something that we do on a European level.
“We’ve already reduced excise considerably and I think that has helped to mitigate the increase in the price of petrol, the price of diesel.”
On whether he expects the issue to come up at this week's European Council meeting he said there will certainly be discussion about further action that the European Union could take to reduce the cost of energy and fuel and electricity in particular.
The Fine Gael leader was speaking at the launch of a planned new Royal College of Surgeons in Ireland (RCSI) Education and Research Centre on the campus of Connolly Hospital in his Dublin West constituency.
