Predictions of further rising inflation over the next two years means that the cost of living is set to continue going up.
Economists behind the European Commission’s latest winter economic forecast say that inflation will rise by 4.6% again this year - it is already up 5.5% year on year.
And it won’t stop there as they say inflation will continue growing in 2023 by another 2.5%.
At the same time, the Commission predicts the Irish economy will grow by 10%.
This is good news on the face of it, but economists always warn that a growing economy can sometimes overheat, driving inflation and costs even higher again.
A spokesman for the European Commission said: “Ireland’s economy is projected to grow overall by 5.5% in 2022, supported by a rapidly recovering labour market, a gradual reduction of large household savings through consumption and a relatively benign financial situation in the corporate sector, according to the European Commission’s Winter 2022 Economic Forecast released today.
“Growth in 2023 is forecast at 4.5%.
“The Commission also estimates that Ireland's annual real GDP growth in 2021 will be 13.7%, somewhat weaker than the estimate of 14.6% in the European Commission Autumn Forecast.
“The analysis points out that growth in the fourth quarter of 2021 is estimated to have been positive, supported by strong exports, especially in the information and communication sector, though restrictions re-introduced due to the Omicron variant negatively affected end-year retail sales and business confidence.
“Production by multinationals was very volatile in October and November, adding uncertainty regarding the final quarter.”
