In May, the Irish economy saw a steady headline inflation, as reported by the Central Statistics Office (CSO) last Thursday. This was despite a surge in consumer prices from April to the following month due to increasing transport, hospitality and restaurant costs.
The newest consumer price index (CPI) released by the stats agency reveals an average increase of 2.6% in May’s prices compared to the same time the previous year. The yearly inflation rate for this period remained the same as it was in April.
However, the month-to-month price growth was 0.5% in May, rising from a March to April growth rate of 0.2%, according to the CSO.
The main elements fuelling the accelerating inflation rate for that month include a 1.5% increase in transport expenses, including air travel costs, and a 1.4% jump in prices for hotels and restaurants.
Yet, for the seventh month since September 2021, the headline CPI growth in May was just below 5%, noted the CSO, as the inflation rate in the republic maintains its decline from the peak levels followed by Russia’s Ukraine invasion and the subsequent energy price escalation globally.
“From the seventh successive month, the inflation rate has stayed under 5 percent,” says Anthony Dawson, a CSO’s Prices Division Statistician.
Over the 12 months leading up to May’s end, transport costs experienced the biggest rise, leaping 6.7%, with a year’s increase in air fares up 6.6% and a jump of 8.5% in May alone. The surge in transport costs was a reflection of the sharp increase in diesel prices, which was up by 17.5% over the year, and petrol, which had risen by 14.5% since May, 2023, with global oil prices surging, according to the CSO.
Hospitality and restaurant prices had surged 4.7% in the year leading to the end of May, due largely to increased accommodation costs, as well as higher prices for alcohol and licensed food establishments, as per the CSO.
Meanwhile, energy costs kept on decreasing, with natural gas prices dropping by 19.6% since May last year, and a 20.7% reduction in electricity costs over the same period.
In the previous year, both private landlords and local councils significantly increased rental prices by 9.1%. Simultaneously, mortgage interest rates surged 18.5% annually and rose 0.5% on a monthly basis. This was due to financial institutions persistently transferring the expense of elevated central bank interest rates to customers.