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Irish prices fall 5.4 pct; biggest drop since 1933

Irish prices fall 5.4 pct; biggest drop since 1933

Ireland is suffering the heaviest rate of deflation since 1933 as prices have fallen 5.4 percent over the past year, the government's Central Statistics Office reported Thursday.
The average cost of goods and services began falling in January and has gained pace in line with Ireland's deepening recession.
The report said prices on average fell 5.4 percent from July 2008 to June 2009, compared to a 4.7 percent annual fall recorded last month. That is the worst rate since the April-June period of 1933 _ the heart of the Great Depression _ when Ireland's annual prices declined 6.9 percent.
However, the report noted that the key planks of Irish society _ education, health care, utilities, and the consumption of tobacco and alcohol products _ are continuing to cost more in line with government tax hikes.
The cost of education rose 4.5 percent, health care 3.4 percent, alcoholic beverages 2.4 percent and tobacco products 12.2 percent. A combination of government-regulated utilities including natural gas, electricity, fixed telephone lines and garbage collection rose a combined 4 percent.
But such gains were overwhelmed by plummeting prices in other parts of the economy, particularly the cost of mortgages in Ireland's burst property market. Average mortgage repayment costs fell 46.2 percent in line with European Central Bank interest-rate cuts and heavy falls in the value of homes.
Ireland's consumer price figures include mortgage costs, unlike in many European countries, because of the exceptionally high levels of home ownership here. Excluding mortgage interest repayments, Ireland's average prices were still down 1.6 percent.
Lower were clothes and shoes, down 12.2 percent; public transport, 4.9 percent; and food and non-alcoholic drinks, 3.3 percent.
Falling prices reflect the shocks hitting Ireland's once-booming economy. Unemployment has doubled over the past year to 11.8 percent, welfare lines have swelled to a record high above 400,000 in this country of 4.2 million, and the government has raised and expanded income taxes in hopes of reversing a runaway budget deficit.
According to an International Monetary Fund report last month, Ireland remains the most expensive country in the 16-nation euro zone, reflecting its high wages and high inflation rates from the 1990s to 2007.
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On the Net:
http://www.cso.ie/releasespublications/documents/prices/current/cpi.pdf


Updated : 2021-10-18 00:18 GMT+08:00