Central Bank warns inflation in Ireland will peak at over 10%

The Central Bank has warned that inflation in Ireland could reach over 10%. In its quarterly bulletin, the bank observes that inflation will cross 10% in the country in the coming months and then decline. The Central Bank said it expects inflation to average out at 7.8% this year before falling to an average of 4.2% next year.

The central bank report echoes the concerns of the government’s Summer Economic Statement released earlier this week. Finance Minister Paschal Donohoe said the government’s Summer Economic Statement and the Central Bank’s report had the same tone.

Income of families will decrease

Household incomes are expected to decline this year and be offset by wage increases next year. The bank also says that household disposable income will fall to an average of 3%. This is happening for the first time in a decade.

The bank also said that the government’s measures on energy tax will have a negative impact on the income. According to the report, wages will increase by 6.6% in the country next year. The report also states that huge wage increases in technology sectors will create imbalances throughout the economy.

According to the report, more than half of the corporation tax comes from 10 multinationals in two sectors: pharmaceuticals and IT. The report also warns that the current high corporation tax puts the country’s public wealth at risk.