Irish consumer price inflation remained at 3.6% in April, matching the rate registered in March, according to a flash estimate of the Harmonised Index of Consumer Prices released on Wednesday. On a month-on-month basis, prices rose 0.4% in April, down from a 1.8% increase in March.
Core inflation, a measure that excludes the typically more volatile components of energy and unprocessed food, eased to 2.3% year-on-year in April from 2.6% in March. The flash estimate provided the seasonal snapshot but did not alter the headline pace recorded in March.
Last week, the finance ministry set out a projection that headline inflation could average between 3.3% and 4.6% over the year. That forecast was explicitly conditional on developments in energy prices and noted the potential influence of the conflict in the Middle East on those energy costs.
In separate national accounts data, Ireland's gross domestic product contracted by 2.0% in the first quarter compared with the prior three months. That quarterly decline corresponded to a 6.0% fall when measured year-on-year. The preliminary GDP estimates published alongside the price data do not include modified domestic demand - the alternate indicator favoured by officials - which strips out distortions associated with foreign multinational activity embedded in headline GDP figures.
Retail sales volumes provided a mixed signal. On an annual basis, volumes were up 1.6% in March and rose 0.2% month-on-month. February's retail sales volumes were revised higher to show a 1.3% year-on-year increase, compared with the previously reported 0.8% gain. The month-on-month fall for February was also revised, to a 0.6% decline rather than the 0.8% previously published.
The suite of figures paints a picture of persistent headline inflation at a multi-quarter high, a modest easing in underlying price pressures as measured by core inflation, and a contraction in headline GDP in the first quarter. Officials signal they prefer measures such as modified domestic demand to assess domestic economic momentum because those metrics remove distortions created by foreign multinationals in Ireland's headline GDP readings.
Data points included in this report:
- HICP annual inflation: 3.6% in April, unchanged from March
- Month-on-month price change: +0.4% in April (down from +1.8% in March)
- Core inflation (ex-energy and unprocessed food): 2.3% year-on-year in April, down from 2.6%
- Finance ministry inflation forecast for the year: 3.3% to 4.6%, dependent on energy price developments
- GDP: -2.0% quarter-on-quarter in Q1; -6.0% year-on-year
- Retail sales volumes: +1.6% year-on-year in March; +0.2% month-on-month in March; February revisions to +1.3% year-on-year and -0.6% month-on-month