Dublin: Inflation in Ireland is expected to remain elevated at around 3.6% in the year to April 2026, driven primarily by a sharp rise in energy costs, according to new research.
Data from the Central Statistics Office shows that energy prices increased by 15.5% over the 12-month period, while food prices also rose by nearly 2%. Analysts attribute the surge largely to higher global oil prices, geopolitical tensions linked to Iran, alongside increasing transportation and production costs.
The Economic and Social Research Institute (ESRI) warns that if current trends persist, inflation could range between 3.3% and 4.6% by the end of the year, placing additional strain on household finances. Core inflation—excluding energy and unprocessed food—has risen by an estimated 2.3% since April 2025.
The report highlights growing financial stress among households. Around 14% of households are unable to fully afford heating or electricity bills, while nearly 30% experience some level of energy-related hardship due to a combination of low incomes, high utility costs, and poor housing conditions.
To lift affected households out of fuel poverty, the ESRI estimates that an average additional income of €480 per household would be required, at an annual cost of approximately €370 million to the government. This is notably lower than the €575 million spent on electricity credits in 2024.
The findings suggest that targeted support measures aimed at vulnerable groups would be the most effective way to address the issue.
Meanwhile, the Department of Finance has cautioned that inflation could rise further depending on developments in the Middle East, particularly their impact on global energy markets.
The ESRI study was conducted with support from the Department of Climate, Energy and the Environment, underscoring the growing concern over the long-term impact of energy costs on living standards in Ireland.
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