Business Irish

Friday 23 February 2018

Little chance of Easter rising as inflation figures due out

Russian President Vladimir Putin
Russian President Vladimir Putin
Colm Kelpie

Colm Kelpie

Another four-day working week beckons, and with the Easter break still fresh in our minds and the Dáil not in session, it's a quieter business week than normal.

Still, there are a number of domestic reports for release on the economic front, including the services index from the Central Statistics Office, inflation data and trade statistics.

The services Purchasing Managers' Index for March is due to be published tomorrow.

The State's services sector expanded at a strong pace again in February, driven by rising domestic demand as new business from abroad slowed.

The index has remained above the 50 mark, marking the difference between expansion and contraction, since July 2012. The consumer price index will be released on Thursday, and it's expected that the inflation rate will remain in negative territory as it did in February.

The average inflation rate was 0.2pc last year, down from 0.5pc in 2013.

Merrion Stockbrokers said it expects that the rate will once again average 0.2pc with inflationary pressures stronger in the second half of 2015 than in the first half.

"For March, we are expecting a monthly rise in the CPI of 0.4pc, which would give a negative annual inflation of 0.8pc. The HICP is expected to be 0.5pc higher in the month, leaving the annual rate again unchanged at -0.4pc," said Merrion economist Alan McQuaid.

On the international front, US service industries, which make up almost 90pc of the world's biggest economy, kept growing in March, a report in the coming week probably will show. The Federal Open Market Committee's March meeting minutes will be released and Federal Reserve Bank of New York President William Dudley will also give two speeches on the economy.

In addition, the Bank of England will probably keep its benchmark interest rate at a record low. Australia, Japan and South Korea will also make policy decisions.

The International Monetary Fund (IMF) releases the analytical chapters of its World Economic Outlook in Washington tomorrow.

The full report on the global economy will be released before the IMF and World Bank spring meetings in Washington later this month. Interestingly, Greek prime minister Alexis Tsipras will travel to Moscow on Wednesday where he will meet with Russian president Vladimir Putin.

The visit has sparked some interest. Is it simply part of normal diplomatic efforts, or is it signalling a tilt towards Moscow in the event that talks with Eurozone leaders fail to reach agreement?

Athens announced on Friday that it would make a payment due to the IMF on Wednesday on time, seeking to quell fears of default after a flurry of contradictory statements on the issue in the days prior to it.

Greece is fast running out of cash and its Eurozone and International Monetary Fund lenders have frozen bailout aid until the new leftist-led government reaches agreement on a package of reforms.

Irish Independent

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