Inflation Remains High#
Irish consumer price inflation held steady at 3.6% in April, matching the rate from March. This figure represents the highest inflation rate in two and a half years, according to the Harmonised Index of Consumer Prices. Month-on-month, prices increased by 0.4% in April, a decrease from the 1.8% rise seen in March.
Core inflation, which excludes volatile items like energy and unprocessed food, slowed to 2.3% year-on-year from 2.6% in March. The finance ministry has projected that inflation could average between 3.3% and 4.6% for the year, depending on the impact of ongoing conflicts in the Middle East on energy prices.
GDP Decline#
In a separate report, Ireland's gross domestic product (GDP) contracted by 2.0% in the first quarter compared to the previous three months. This decline also marks a significant 6.0% decrease when compared to the same period last year. GDP is a measure of the total economic output of a country, and a contraction indicates that the economy is shrinking.
Retail Sales Trends#
Despite the GDP decline, retail sales volumes showed some positive signs, rising by 1.6% year-on-year in March and increasing by 0.2% month-on-month. Additionally, February’s retail sales figures were revised to reflect a 1.3% year-on-year increase, up from the previously reported 0.8%. The month-on-month decline for February was also adjusted to 0.6% from 0.8%.
Understanding Economic Measures#
It’s important to note that the preliminary GDP estimates do not account for modified domestic demand. This measure is preferred by officials as it provides a clearer picture of economic growth by excluding the effects of foreign multinationals on Ireland’s GDP figures.