Economy

Central Bank forecasts ‘uneven’ road to lower inflation

Bank cautioned government against over-stimulating economy in October’s budget, warning curbing inflation will depend on containing domestic demand

The Central Bank of Ireland urged government to focus on reducing demand while increasing supply in the economy

The road to lower inflation is likely to be “gradual but uneven”, according to the latest forecast from the Central Bank of Ireland, which cautioned the government against “cross-purposing” domestic monetary policy with that of Europe.

In its third quarterly report of 2023, the bank issued a warning of the effects of over-stimulating the economy in October’s budget on curbing inflation.

The bank currently predicts an average inflationary rate of 5.4 per cent for this ...