Irish prices remain high despite drop in inflation

Consumer prices fell in Ireland in 2009 and 2010 but prices remain high by EU standards. Ireland was the fifth most expensive EU state in 2010, after Denmark, Finland, Luxembourg and Sweden with prices 18% above the EU average. However this represents a considerable improvement on 2009 when Irish prices were 26% above the EU average and second only to Denmark, according to the report Measuring Ireland’s Progress 2010, published by the CSO today.

Ireland has remained in recession in 2010, with a negative growth rate experienced by the economy for the third year in a row. The public balance deficit was the highest of any EU member state at just under a third of GDP, while government debt increased to just over 96% of GDP, having been at only 25% of GDP in 2007. Ireland’s employment rate was below the EU average, and its unemployment rate was the sixth highest rate in the EU. The productivity of the Irish workforce remained above the EU average.

In 2010, Ireland had the highest proportion of young people in the EU, and the lowest proportion of old people. Average class size at primary level in Ireland is the second highest in the EU, though the early school-leaver rate is better than the EU average. Irish 15 year old students had the joint 17th highest mathematical literacy among participating EU countries in 2009 while on reading literacy Ireland was eighth highest. The proportion of the population aged 25-34 in Ireland that has completed third-level education is the third highest in the EU. Ireland has the lowest divorce rate and the highest fertility rate in the EU, and its population is increasing at a higher rate than in any other EU country.

Over the four-year period 2005-2009, the number of kidnapping and related offences nearly doubled while the number of controlled drug offences increased by nearly two-thirds and the number of weapons and explosives offences increased by more than half. The number of murders/manslaughters recorded in Ireland fell from its peak of 84 in 2007 to 60 in 2009. Ireland’s greenhouse gas emissions fell in 2009 and were below the Kyoto target for the first time since 1996 and its level of acid rain precursor emissions continues to fall.

Economy: The GDP growth rate was -0.4% in 2010. The public balance deficit was 32.4% of GDP, the largest by far of any EU member state. And government debt increased substantially to 96.2% of GDP in 2010, the fourth highest debt/GDP ratio in the EU, having been 25% only three years previously. Nonetheless, in 2010 Ireland had the joint third highest GDP per capita in the EU at 25% above the EU average, although, based on GNI, Ireland was the eleventh highest. Ireland’s gross fixed capital formation fell sharply since 2007 to only 11.3% of GDP in 2010, lower than any other EU state. The productivity of the Irish workforce in 2010, measured by GDP per person employed, was just over a third higher than the EU average. As Irish employees work longer hours, the productivity per hour worked is relatively lower, but still about 23% above the EU average. (Tables 1.3, 1.4, 1.6, 1.10, 1.13, 3.3 and 3.4).

Prices: Inflation in Ireland (as measured by the Harmonised Index of Consumer Prices) fell in 2010, with Latvia being the only other EU state where prices fell. Over the past decade, Ireland became less competitive, with the harmonised competitiveness indicator (deflated by consumer prices) increasing by 17% between 2001 and 2010; this indicates a significant deterioration in price competitiveness for Ireland vis-à-vis our main trading partners. Appreciation of the Euro against other major currencies contributed to this decline. Ireland had the fifth highest price levels in the EU in 2010. (Tables 1.18, 1.19, 1.21 and 1.23).

Employment and unemployment: The employment rate (for those aged 15-64) in Ireland rose from 65.7% in 2001 to 69.2% in 2007, but fell to 58.9% by 2011. The male employment rate was stable over the 2001 to 2008 period at about 76% but fell sharply over the next three years to 62.6% in early 2011. The female employment rate increased from 54.6% in 2001 to 60.7% in 2007 before falling to 55.3% in early 2011. In 2010, Ireland’s employment rate was below the EU average, and its unemployment rate was the sixth highest rate in the EU. (Tables 3.1, 3.2 and 3.6).

Social cohesion: In 2009, 5.5% of the population were in consistent poverty. This was an increase on the level recorded in 2008, when 4.2% of the population was living in consistent poverty. Voter turnout at Dáil elections gradually declined from over 76% in the 1970s to less than 63% in 2002 before increasing to nearly 70% in February 2011. There was a general decline in voting turnout in most EU countries between 1984 and 2009. Ireland’s net official development assistance increased from 0.41% of GNI in 2005 to 0.54% in 2009, still short of the UN 2007 target of 0.7%. (Tables 4.6, 4.9, 4.10 and 4.12).

Education: Irish 15 year old students had the joint 17th highest mathematical literacy among participating EU countries in 2009 and were below the OECD average, while on reading literacy Ireland was eighth highest and ranked slightly above the OCED average. In 2010, 46% of the population aged 25-34 had completed third level education, the third highest rate across the EU. The proportion of the Irish population aged 18-24 who left  school with at most lower secondary education was 10.5% in 2010, better than the EU average of 14.1%. Average class size at primary level in Ireland in 2008/2009 was 24.2, the second highest in the EU. (Tables 5.5, 5.7, 5.8, 5.9 and 5.12).

Health: Current public expenditure on health care in Ireland averaged €3,234 per person in 2009 (at constant 2010 prices), an increase of more than half on the 2000 level. Life expectancy at birth in Ireland is 76.8 years for males and 81.6 years for females, and these figures are reasonably close to the EU average. (Tables 6.1, 6.2, 6.3 and 6.4).

Population: Ireland had the highest percentage increase in population between 2000 and 2010 in the EU. The rate of natural increase of the population in Ireland was 10.2 per 1,000 in 2009 compared with an EU average of only 1.0. In 2009, Ireland was the only EU country with a fertility rate greater than 2; the EU average was 1.6. The divorce rate in Ireland was 0.7 divorces per 1,000 population in 2009, the lowest rate in the EU. In 2010, Ireland had the highest proportion of young people (0-14) in the EU, and the lowest  proportion of old people (65 and over); these combined to give Ireland an age dependency ratio that was similar to the EU average. (Tables 7.1, 7.4, 7.7, 7.9, 7.11 and 7.14).

Housing: The number of dwelling units built increased sharply to peak at almost 90,000 in 2006 before collapsing to 14,600 in 2010, back to the level it was at in 1970. The average value of a new housing loan in Ireland rose from €102,300 in 2000 to €266,400 in 2007 before dropping to €231,600 in 2009. (Graph 8.1 and table 8.3).

Crime: The number of kidnapping and related offences nearly doubled over the four year period 2005-2009 while the number of controlled drug offences increased by nearly two-thirds and the number of weapons and explosives offences increased by more than half. However, the number of murders/manslaughters in Ireland decreased from its peak of 84 in 2007 to 60 in 2009. (Tables 9.1 and 9.6).

Environment: Ireland’s greenhouse gas emissions were at 112.1% of 1990 levels in 2009. This was lower than the Kyoto 2008-2010 target (by 0.9 percentage points). The level of acid rain precursor emissions fell from 464.6 SO2 equivalent per 1,000 tonnes of gas emitted in 2000 to 318.1 in 2008, 4% above the Gothenburg Protocol 2010 target level of 306. This decrease is mainly due to lower levels of sulphur dioxide emissions. (Tables 10.1 and 10.7).

Editor's note

Measuring Ireland's Progress 2010 is available on the CSO web site www.cso.ie (PDF 1.4MB) (PDF 1,419KB)  

The report may be purchased from :

The Central Statistics Office, Information Section, Skehard Road, Cork

Government Publications Sales Office, Sun Alliance House, Molesworth Street, Dublin 2

Price: €5

For further information:

Helen Cahill at 01 498 4253 or Adrian Redmond at 01 498 4309.

13 September 2011

- ENDS -