The Economic and Social Research Institute (ESRI) has warned of “second-round effects” on prices later this year as a result of higher energy costs.<\/p>\n
In its latest Quarterly Economic Commentary, the ESRI said there is typically a nine-month lag between increases in fuel and food prices, suggesting even higher grocery bills in the autumn and winter.<\/p>\n
Lower and middle income households may require support but this should be temporary and targeted, according to the institute.<\/p>\n
It has revised upwards its forecasts for inflation to 3.7% for 2026 and 3.1% for 2027.<\/p>\n
The ESRI also upgraded its forecast for economic growth, as measured by Modified Domestic Demand, to 2.6% for 2026.<\/p>\n
The upward revision is linked to stronger than anticipated investment on the back of stronger housing output and rising investment in technology equipment related to artificial intelligence and data centres.<\/p>\n
“International headwinds are strong; fossil fuel prices remain elevated, and uncertainty remains around the conflict in the Middle East,” said report author Professor Conor O’Toole.<\/p>\n
“These higher prices are likely to raise consumer prices in Ireland this year and next to a greater extent than previously anticipated,” Mr O’Toole said.<\/p>\n
Fuel support package<\/p>\n
In its assessment, the ESRI described the fuel support package that followed protests earlier this year as “poorly targeted”, and said the structure of the supports was “disappointing”.<\/p>\n
According to the report, the ready availability of revenue, and hence the weakened budget constraints, along with intense political pressure, provided conditions for sub-optimal policies.<\/p>\n
The ESRI said that upcoming public sector pay talks provide the next setting in which this mix of readily available funds and political pressure will apply.<\/p>\n
“In that context, it is important that the upcoming public sector pay talks are based on a clear understanding of the public finances vulnerabilities,” said report author Professor Alan Barrett.<\/p>\n
Housing<\/p>\n
The ESRI has revised its annual forecast for housing completions up to 38,500 for 2026 and 40,500 for 2027.<\/p>\n
“However, the absence of sustained upward momentum in planning permission figures presents a challenge to raising output substantially and meeting housing targets in the medium term,” the report states.<\/p>\n
“Given the failure to meet housing targets in the recent past and the expectation of continued shortfalls relative to demand, the housing deficit will continue to grow,” the ESRI said.<\/p>\n
Labour market<\/p>\n
The ESRI’s outlook for the labour market remains broadly positive and the report authors say they expect unemployment to remain low.<\/p>\n
However, the commentary analyses research on the possible impact of artificial intelligence on the Irish labour market.<\/p>\n
“These studies point to considerable numbers who could be negatively impacted, highlighting the need for close attention to this area,” the report concludes.<\/p>\n","protected":false},"excerpt":{"rendered":"The Economic and Social Research Institute (ESRI) has warned of “second-round effects” on prices later this year as…\n","protected":false},"author":2,"featured_media":516816,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-516815","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\/516815","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=516815"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/516815\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/516816"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=516815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=516815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=516815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}