Property tax and alcohol prices push up the cost of living
THE property tax contributed to a 0.3pc rise in the cost of living in the past year with higher insurance, restaurant, alcohol and cigarette prices also playing a part.
Prices rose by 0.1pc in April while the annual inflation rate rose to 0.3pc, the latest Central Statistics Office figures show.
It said that the main factors contributing to the annual change were higher health and car insurance premiums, and the increased local property tax.
The cost of "other services", which includes funerals, weddings and legal services as well as the property tax, rose by 23.9pc in the last 12 months, the CSO figures show.
Health insurance premiums rose by 8.5pc and car insurance rose 3.5pc, though home insurance fell by 5.5pc.
Restaurant and pub prices rose by 2.5pc while the cost of alcohol in supermarkets and off-licences rose by 4.6pc and cigarette prices went up 2.2pc.
Private rents rose by 9.1pc though homeowners saw mortgage interest repayments drop 11pc.
Food prices fell by 2.1pc in the year – with carbs costing less thanks to a 24pc drop in the price of potatoes, bread down 2.6pc, pasta down 2.9pc and breakfast cereals down 1.4pc.
In April, there was a 32.5pc increase in airfares, which was probably a result of a late Easter.
But even though the overall inflation rate was modest, that was partly due to low European interest rates and oil prices, which could change, said Davy stockbrokers analyst David McNamara.
"The bottom line is that demand in the economy is not quite as weak as the headline inflation rate suggests," he said.
"A spike in oil prices could quickly impact on inflation."
While low inflation was good news for many households, many would be feeling the pinch of a 4.5pc rise in education costs along with higher alcohol, tobacco and insurance costs.
The Irish Small and Medium Enterprises association said that low inflation figures masked high state-influenced business costs.
Merrion economist Alan McQuaid said that while domestic inflationary pressure was set to remain low, there could be some uptick due to rising wages later in the year.