Ireland’s Inflation Hits a 38 Year High in 2022 – CSO
By The Headlines, January 6, 2023 | 10:05 PM
The Central Statistics Office has released a compilation of significant statistics about the economy and business in 2022.
The report states that inflation peaked at 9.2% in October before falling slightly in November. This was the highest rate in 38 years in Irish history.
This was because of an expensive energy price spike and a very expensive food cost. Energy prices are remaining volatile in the near future, but they peaked in early 2021 due to increased demand.
What is Economic Inflation?
Inflation is the rate of change in prices over time. The rate of change can be based on a broad measure that looks at overall inflation or the cost of living in a country. It is the change in the price of a particular good or service over a particular time period. As time progresses, goods and/or services can become more expensive or less expensive.
How did inflation affect various sectors in Ireland?
Wholesale energy prices had gone down to their lowest levels in 2021. This benefited energy consumers, and energy generators, by making the market more attractive to new entrants.
Inflation in the agricultural marketing sector saw the price of fertiliser go up by 141% on average over 2022. The report also noted that it fell by 19% as a result of reduced demand.
Housing starts bounced back in 2022 with more homes started by the end of the third quarter (20,807 units) compared to the year before that (20,560 units).
Planning permissions in the third quarter of this year were down 41% compared to the third quarter of 2021.
Building goods in the construction sector are feeling significant inflation increases on an annual basis with prices up 57% in October alone. Rising costs have left many contractors without business and suppliers struggling to maintain profitability while still remaining competitive.
Home prices continue to rise for the ninth consecutive month. In September, the national property index was 2.6% higher than it was one year ago.
The average price of property across the nation is around €300,000 with the lowest median price at €148,000 in Longford and the highest median price at €620,000 in Dún Laoghaire-Rathdown.
Overall economic growth in 2022 was 11.7% compared to 2021. Growth in this time period was due to major corporations and the effect they have on international markets.
When measured by the Modified Domestic Demand, which strips out the impact of multinationals, it increased by 10.1%.
Why do analysts forecast the economy would be strong in the future?
Even with the rise in inflation, Ireland improved its tourism with 12.8 million more people travelling to their airports in Q1 & Q2 2021. The number of travellers is expected to decline in the future but still has a lot of room to grow with 13.8 million passengers passing through Irish airports in the first half of 2022.
Dublin Airport had fewer people using it last October, with only 200,000 individuals travelling.
Last month, CSO figures showed that the number of people using public transportation has reached pre-pandemic levels. This is quite impressive as car traffic is slightly below that of 2019 levels.