Category: Archive

Irish consumer prices in freefall

February 17, 2011

By Staff Reporter

The tumbling of property prices have been given considerable attention but price shrinkage is occurring right across the board and it is doing so at a fast clip than in any other European country.
For many, it’s a silver lining in a dark economic cloud. Ireland has been known for some years by an unflattering sobriquet: “Ireland of the rip-offs.”
It’s still possible to lose your shirt on some items, but perhaps not the price of that shirt.
Clothing and footwear prices fell by 3.6 percent in April and are down almost 12 percent so far this year, the Irish Independent reported.
In overall terms, falls in mortgage interest, rents, clothing and food prices resulted in the cost of living falling 0.8 percent last month and by 3.5 percent in the year to the end of April.
“This is the steepest fall in inflation since 1933. The drop was sharper than economists predicted, leading them to revise estimates downward as the ‘consumer spending strike’ continues, the report stated.
That said, prices are now simply what they in the summer of 2007 and while most Irish consumers would remember those not too distant days as more flush in cash terms, they were certainly not cheap ones by any standard.
Nevertheless, prices are expected to continue falling in the months ahead.
Pushing against this trend are prices for alcohol and tobacco which were hit with an extra tax loading in the Irish government’s budget.
Ireland now has the lowest inflation in Europe with Portugal, Luxembourg and Spain the only other countries with falling prices, the report added.
But any benefits to consumers are being strongly offset by tax increases and rises in health insurance premiums while soaring unemployment is curbing people’s ability to take advantage of price drops.

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