Economics: Ireland’s annual inflation rate eases back to 0.5% in November

New figures from the CSO yesterday showed that overall inflationary pressures still remain fairly-muted. The annual inflation rate eased back from the previous month.

The annual inflation rate came in at 0.5% in November as against 0.6% in October. Consumer prices were down 0.2% in the month, compared with a monthly drop of 0.1% in October.

Meanwhile, the HICP rate, the measure used for EU comparative purposes, was down 0.1% in the month, giving an annual inflation rate on this basis of 0.5%, unchanged from the previous month.

The main monthly changes affecting the CPI in November were decreases in the cost of hotel accommodation and motor/health insurance. Meanwhile, electricity/gas charges, the cost of home-heating oil and clothing and footwear were all higher in the month.

Although the annual inflation rate should pick up in the coming months, inflationary pressures in Ireland as measured by the headline consumer price index are in general likely to stay reasonably-well contained for the immediate future.

Ireland’s average inflation rate was 0% in 2016, compared with -0.3% in 2015 and 0.2% in 2014. Based on the figures for the first eleven months of the year, it now looks like the average for 2017 as a whole will be 0.3%. For 2018, it should pick up modestly to between 0.5% and 1.0%.