The central bank on Wednesday cut its forecast for 2023 HICP
growth from the 6.3% predicted in October and sees price growth
slowing to 3.2% in 2024 and 2.2% in 2025, when core inflation of
2.6% would pass out the headline rate.
It added, however, that a significant amount of uncertainty
remained around the precise path for inflation, and the extent
to which underlying inflation measures will remain elevated.
The central bank also nudged up its forecast for domestic
economic growth for 2023 after activity late last year and early
this year was "somewhat stronger" than expected, while the
global economic backdrop proved more benign.
Modified domestic demand (MDD), officials' preferred measure
of economic growth, is now forecast to rise by 3.1% this year
after it expanded by 8.2% thanks to a post-lockdown investment
boom last year.
While higher prices caused real average household disposable
income to fall slightly in 2022, the bank now sees real incomes
growing by more than 2% in each of the next two years,
supporting consumer spending of more than twice that level.
The jobless rate is also set to remain near record lows for
the next three years, spurring average wage growth of 6.5% this
year that the bank expects to moderate to 3.3% in 2025 with no
nascent sign of a wage-price spiral emerging.
After Ireland produced one of the few budget surpluses in
Europe last year, the central bank significantly increased the
degree to which that would increase. It sees a surplus of 2.7%
of gross national income this year, rising to 4.8% or 15.8
billion euros in each of the following two years.
(Reporting by Padraic Halpin; Editing by Lincoln Feast.)
DUBLIN, March 8 (Reuters) - Ireland's central bank sees
inflation growing at a slower than previously forecast 5% this
year before falling towards 2% by 2025 when core inflation is
expected to be higher than the headline rate.
Annual Irish inflation, as measured by the Harmonised Index
of Consumer Prices (HICP), has fallen to 8% from a high of 9.6%
last July, primarily due to lower energy prices but also slower
growth in prices charged by the services sector.
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