Anti-Inflation Action Plan and Progress Report

Introduction

  1. The Forfas Consumer Pricing Report 2003, which benchmarked Ireland's price performance against our European partners, found that:

    Increases in consumer prices over the past five years have sharply outpaced those of our European neighbours, resulting in an estimated overall consumer price level which is 12% above the Euro area average;

    Ireland is now estimated to have been the second most expensive country in the eurozone in 2002 for consumer prices, marginally behind Finland; and is very likely to become the most expensive country in the eurozone in 2003;

    The non-internationally traded sectors were the primary drivers of consumer inflation in Ireland in 2002.  The study also revealed that another important driver of inflation in 2002 was price increases in goods and services which are subject to some level of direct government influence;

    Ireland was particularly expensive among eurozone countries in 2002 for tobacco (1 = 1st most expensive), pubs and restaurants (1), food and non-alcoholic beverages (1), residential rents (1), off-licence alcohol (2), and recreational and cultural services.

    Among individual expenditure categories, "pubs & restaurants" were the most important driver of national inflation - accounting for 29 % of the increase in the standard basket of consumer goods/services in the year to end January, 2003. Combined with (off-licence) alcoholic beverages and tobacco (19%), transport (16%), and miscellaneous goods & services (15%), these non-internationally traded sectors accounted for almost 80% of national inflation in 2002.

    Ireland was the most expensive country in the eurozone for foodstuffs from low - priced outlets in 2002; the second most expensive for foodstuffs from mid - priced retail outlets; and the third most expensive for foodstuffs from high - priced retail outlets.

    Ireland was also found to be the second most expensive country in which to buy non-food consumables in the eurozone across all retail types.

  2. It was agreed in Sustaining Progress that, while some of the problems underlying our high levels of inflation can only be tackled over the medium term, an explicit and co - ordinated set of policies could help to slow down the present rate of domestically generated inflation.  It was also agreed that a group, comprising representatives from the Department of the Taoiseach, Finance and Enterprise, Trade and Employment, as well as representatives from IBEC and ICTU, would draw up a detailed action plan with this in mind; and that representatives of the Competition Authority and the Office of the Director of Consumer Affairs would be invited to participate in the work of the Group as appropriate.
  3. The group has since adopted the attached action plan on the basis of proposals put forward by IBEC and ICTU as set out in Sustaining Progress. Work to date in implementing the plan is outlined under each of the main headings.
Linked Files:
To view and print PDF files, a viewer program called Acrobat Reader Version is required. A free copy of this Adobe Reader can be downloaded from the Adobe Website