Budget 2024

Government’s planned big spending budget could fuel inflation, Central Bank warns

The Central Bank forecasts inflation will average at 5.4 per cent this year, but will decline to 3.2 per cent and 2.3 per cent in 2025

Core inflation, which excludes energy and food, is expected to remain at 2.7 per cent in 2025, according to the Central Bank of Ireland

Increased spending risks creating inflationary pressures and feeding overheating risks, a senior Central Bank of Ireland official has warned.

Robert Kelly, director of economics and statistics, described public finances as being “broadly in a healthy position”.

But he warned of potential overheating risks within the Irish economy and described Ireland’s export- oriented economy as sensitive to external factors.

Kelly was speaking as he appeared alongside colleagues before the Oireachtas Committee for Budgetary Oversight on Tuesday ...