By Sean Norman

The latest statistics show that the Consumer Price Index (CPI) rose by 1.7% between August 2023 and August 2024, down from July’s increase of 2.2% from last year. 

Commenting on the report Anthony Dawson a Statistician in the prices division said, “Today’s publication of the CPI shows that prices for consumer goods and services in August 2024 rose by 1.7% on average when compared with August 2023. This is the first time since June 2021 that the CPI, Ireland’s official measure of inflation, has been below 2.0%.” 

Source: CSO Ireland 

The biggest drop in pricing was found in clothing and footwear, which went down by 6%, and a drop of 2% in utility prices such as fuel, water and electricity. 

When asked about the effect these drops have on consumers Maeve Ahern, an author on the report stated: “We’re looking at a positive downward trend for households in terms of their utility bills and clothing costs mostly due to providers cutting their rates by about 3%.”

Alcohol and tobacco saw a rise of nearly 4% as did transport costs, the highest increases in comparison to last year were found in restaurants and hotels at 4.5% which according to Ahern is a direct result of alcohol becoming more expensive this year.” The national average price for a pint of larger now sits at €6.25. 

Transport has gone up “primarily thanks to an increase in petrol and diesel, alongside airfares getting more expensive as well,” says Ahern. 

The CPI also stated that “Miscellaneous Goods & Services” have risen by 4%. This would be items such as health and motor insurance, or personal grooming services such as salons and barbers, according to Ahern.

According to the EU Harmonised Index of Consumer Prices (HICP), which measures the average inflation rates across the EU, prices on average went up by 1%.  

Alongside the CPI the National Average Price table was released. This measures the average prices for select goods and services across the country. 

Source: CSO Ireland. 

Other notable items include a decrease in the cost of a slice pan on average, cheese and spaghetti, with a 2 litre carton of milk remaining the same price. 

Dawson added: “It’s important to remember that this is only a flash estimate and not the final HICP which is released in January of next year, so full quality control can’t be guaranteed, these flash estimates are a useful indicator to see the type of trajectory we’re on however.” 

“I’ve definitely been spending more the last few shops, I think things are just getting pricier everywhere, especially food,” said Mary Donnelly (36), a primary school teacher when asked about her shopping habits.  

When asked about her thoughts on Ireland’s inflation rate dropping, she said, “I can’t say I have much a grasp on that, but if things don’t change soon, we’re all going to be making major changes to our lives, especially with the cost of rent on top of all this.”

John Scally, a senior economist with the Central Bank commented that, “we’re getting closer to our target of 2% annual inflation by 2025, 2% is an important target to hit for Ireland for the creation of conditions that will lead to sustainable growth for both households and for businesses as well.”

According to Scally, “inflation has become much harder to parse in recent years thanks to the ongoing war in Ukraine affecting prices of things like gas and even crop plants and of course the Covid 19 pandemic which completely threw off the world economy never mind just Ireland’s.”

“Ireland has always been at the whim of external inflation since we’re an open economy, and thankfully the shocks are beginning to subside, as of now we’re looking into inflation for next year and for two years ahead of that to keep our estimates as accurate as possible.”

“We’re looking into ways to further improve our accuracy by looking at implementing new tools like machine learning and AI which should help not only with the accuracy of our reports but also the speed we can get them finished at.”