Dublin: Simon Harris has warned that inflation in Ireland is expected to remain significantly higher than previously forecast, with rising energy costs continuing to put pressure on households and the wider economy.
Speaking before the Budgetary Oversight Committee, Harris said the Department of Finance now expects inflation to reach 3.75 percent in 2026 — a sharp increase from the department’s earlier forecast of 1.8 percent issued at the beginning of the year.
Energy Costs Driving Inflation
According to the minister, the upward revision is largely linked to rising global energy prices.
Harris noted that the cost of several essential items, including home heating oil, has risen by more than 80 percent compared with last year.
Latest figures from the Central Statistics Office show that consumer prices in Ireland increased by 3.7 percent annually, exceeding the 3.3 percent estimate contained in last month’s Spring Forecast.
The latest figure marks the highest annual inflation rate recorded since early 2024.
Middle East Tensions Adding Pressure
Addressing the committee, Harris said geopolitical instability — particularly developments in the Middle East — remains a major concern for the Irish economy.
“The most significant risk is that higher energy prices could persist for longer,” he said, adding that inflationary pressures may worsen depending on developments in the region.
Harris also stated that without the conflict involving Iran, the government would likely have revised Ireland’s growth forecasts upward rather than downward.
Economy Still Expected to Grow
Despite the inflation concerns, the Finance Minister said the Irish economy is still expected to continue growing, although at a more moderate pace than in recent years.
He indicated that economic growth would likely be accompanied by higher inflation than the country has experienced in the recent past.
IMF Concerns Raised in Committee
During the meeting, Joe Neville referenced recent concerns raised by the International Monetary Fund regarding Ireland’s narrow tax base and rising levels of public expenditure.
Jack Chambers defended the government’s economic strategy, insisting that Ireland remains on a sustainable financial path despite growing external pressures.
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