New figures from the Central Statistics Office (CSO) reveal that Ireland’s inflation rate increased to 2% on an annual basis in March, up from 1.8% in February. This marks the first time inflation has reached or exceeded 2% since July 2024, when it stood at 2.2%.
The CSO reports that the rise in inflation was primarily driven by price increases in several key areas, notably in the hospitality sector. Restaurant and hotel prices saw significant hikes, mainly due to higher costs for alcoholic drinks and food consumed on-site.
Another factor contributing to the inflationary pressures were higher rents and mortgage interest repayments, although these were partially offset by a decrease in the price of home heating oil. Additionally, the CSO noted an increase in health and motor insurance premiums, further contributing to the rising cost of living.
The price of food and non-alcoholic beverages rose by 4.2% compared to the same time last year, with products like milk, cheese, eggs, chocolate, soft drinks, and meat seeing notable price increases. Despite these hikes, the clothing and footwear sector saw a reduction in prices, which fell by 1.9% due to ongoing sales.
The Harmonised Index of Consumer Prices (HICP), which excludes mortgage-related costs and is used for EU-wide comparisons, rose by 0.7% in March, bringing its annual increase to 1.8%. This index provides a more consistent measure of inflation across the European Union.
In its latest report, the CSO also provided data on national average prices for various goods and services. Some key figures included a slight reduction in the price of an 800g white sliced pan, which decreased by one cent over the year. In contrast, the price of 500g of spaghetti increased by two cents, and the cost of 2.5kg of potatoes dropped by nine cents.
On the dairy front, the price of 2 litres of full-fat milk rose by 28 cents, while butter saw a significant increase of 76 cents per pound. The price of Irish cheddar also rose, increasing by 50 cents per kilogram.
Alcohol prices were also affected, with the average cost of a take-home 50cl can of lager rising by two cents to €2.39, while a can of cider remained steady at €2.69. Additionally, the cost of a pint of stout in licensed premises rose by 39 cents to €6.04, while a pint of lager increased by 37 cents to €6.44 compared to March 2024.
The overall increase in inflation highlights ongoing pressures on household budgets, with rising costs in essential goods and services. Despite some relief in specific categories, such as clothing and heating oil, consumers are likely to face continued inflationary challenges in the coming months.
