The Central Bank has revised upwards its forecasts for inflation for this year and next, and warned of the possibility of it reaching almost 5% in a severe scenario in 2027.<\/p>\n
The bank said higher energy costs are eroding household incomes and damping consumer confidence, while also feeding through to broader cost of living pressures.<\/p>\n
It said it is also eating into pay increases. When inflation is taken into account, wages will only rise by 0.5% this year.<\/p>\n
If the severe scenario of 5% inflation happens next year, wages would fall in real terms.<\/p>\n
It said its baseline forecast for inflation is that it would average 3.5% this year and 2.9% in 2027.<\/p>\n
The Central Bank’s director of statistics Robert Kelly said: “With the disruption in the Strait of Hormuz continuing into its fourth month, despite news of a resolution, uncertainty remains.<\/p>\n
“Even when the conflict is fully resolved, the restoration of supply chains will take an extended period.”<\/p>\n
It said the domestic economy will continue to expand at a modest rate with growth of 3.3% this year and 2.8% in 2027.<\/p>\n
The Central Bank has also joined the Irish Fiscal Advisory Council in warning about the effect of consistent Government spending overruns on the public finances.<\/p>\n
It said the additional expenditure would mean the underlying deficit, when windfall corporation tax paid by multinationals is excluded, would deteriorate by \u20ac25.7 billion by 2030.<\/p>\n
It said this would erode fiscal buffers and limit the Government\u2019s capacity to respond to future negative shocks.<\/p>\n
It said while expenditure has increased significantly, it had become more dependent on uncertain tax revenue from multinationals.<\/p>\n
It said expenditure growth had exceeded Budget figures in the last five years, and overall spending was well above sustainable capacity.<\/p>\n
The bank said that growth in employment is moderating with job advertisements falling, expectations about wages declining and unemployment edging upwards.<\/p>\n
But it has still forecast growth in employment this year and next.<\/p>\n","protected":false},"excerpt":{"rendered":"The Central Bank has revised upwards its forecasts for inflation for this year and next, and warned of…\n","protected":false},"author":2,"featured_media":505327,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-505326","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/505326","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=505326"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/505326\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/505327"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=505326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=505326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=505326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}