Quarterly Bulletin No.3 2022

Read the full Comment for Quarterly Bulletin No.3 2022.

Léigh tráchtaireacht ar an Timpeallacht Gheilleagrach.

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The recovery in demand since the pandemic abated has been tempered by the effects of the Russian invasion of Ukraine and more persistent supply-side challenges. While the economy is still forecast to grow in 2022, higher and mostly externally-driven inflation will weigh on households and businesses in the short term. Uncertainty around the medium-term outlook remains high. However, the central expectation is that inflation will start to decline during the second half of this year, falling to just above 2 per cent in 2024.

Read this chapter in full: The Irish Economy.

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Growth in employment in recent quarters has been mainly supported by women over 35 and young people.

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The pandemic had a major impact on the public finances, resulting in an exceptional €27 billion increase in government spending up to 2021 and adding to the national debt. 

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The unusual configuration of risks currently facing the Irish economy and the
wider international environment means that the central forecast presented in
this Bulletin is subject to a high degree of uncertainty.

Read in full: Short-Run Outlook for the Irish economy in a Downside Scenario

The longer than expected nature of the global inflationary shock,
exacerbated by the war, pre-existing supply chain issues and further
lockdowns in some countries, are generating an erosion of disposable
incomes and increases in production costs.

Read in full: Developments in Monetary Policy and the International Economic Outlook

The value of household spending and deposit saving has remained relatively steady in recent months, as the economic and geopolitical uncertainty resulting from the Russian invasion of Ukraine and the heightened inflationary environment unfolds.

Read in full: Spending, Credit, and Deposits: An Update on Irish Household and Business Activity

Households have experienced significant cost of living increases over the past year. Real incomes are forecast to fall this year and certain households, such as lower income ones, are disproportionately impacted by the current high inflation rate (Lydon, 2022).

Read in full: Savings Across the Income Distribution

This Box builds on Box E in Quarterly Bulletin 1 2022 that looked at a measure of underlying inflation known as common inflation. We present updated estimates of core, trimmed and common inflation for Ireland and consider whether increases in energy and food prices are broadening to other categories of consumer goods and services.

Read in full: Developments in the underlying inflation trends - have sector specific shocks become broader?