MNI BRIEF: Path To Lower Inflation Gradual and Uneven-Irish CB
Irish central bank says inflation slowing, but future path increasingly likely to be led by domestic factors.
Irish inflation is easing, helped by by tighter monetary policy, but it remains high and its future path sensitive to potential global shocks and the persistence of buoyant domestic demand, the Central Bank of Ireland noted in its latest Quarterly Bulletin.
In the release published Tuesday, the central bank said domestic inflation will dip to an average 5.4% this year and 2.3% by 2025 -- a touch above the ECB's average projection for the whole of the eurozone.
Headline harmonised inflation's path back to lower levels is likely to be gradual and uneven, said Robert Kelly, Director of Economics and Research, noting that the contribution of external drivers has declined, with domestic factors playing an increasingly important role in price dynamics over the forecast horizon. Reflecting the stronger role of domestic factors in driving services inflation in particular, Kelly said core inflation (excluding energy and food) is expected to be more persistent, and average 2.7% in 2025.