According to a recent breakdown by the Central Statistics Office (CSO), households in Ireland experienced varying levels of inflation compared to the overall Consumer Price Index (CPI) figure of 7.7% in March 2023. The analysis revealed key findings based on different household characteristics.
Lowest-income households faced higher inflation rates of up to 8.3%, while some higher-income households experienced inflation of 7.3%. Households paying a mortgage had an estimated annual inflation of 8.1%, while those who owned their homes outright experienced 7.2% inflation. Renting from a local authority led to an estimated inflation rate of 8.2%, compared to 7.3% for private rentals.
In terms of location, urban households had the same inflation rate as the overall CPI (7.7%), while rural households experienced a slightly lower inflation rate of 7.4%. The age of the household reference person also played a role, with households under 35 facing an estimated inflation rate of 7.2%, compared to 7.7% for those aged 35-64 and 7.8% for those aged 65 or over.
Households with specific compositions also experienced higher-than-average inflation rates. Single-adult households without children faced the highest inflation rate of 8.5%, followed by households with one adult and children (8.0%) and two adults without children (7.8%). Households with two adults and more than three children, as well as households with three or more adults with children, also had inflation rates above the average (7.9%).
The analysis showed that the cost of energy, particularly electricity, gas, and other fuels, was a major driver of inflation. Price changes in this category contributed almost a quarter of the annual change in CPI. Food and non-alcoholic beverages, as well as restaurants and hotels, also contributed significantly to inflation.
Over a five-year period from March 2018 to March 2023, overall inflation measured by the CPI was 16.9%. However, estimated inflation varied across different household groups. Lower-income households experienced estimated price increases of 19.1%, while higher-income households had an estimated increase of 16.2%. Renters, especially those renting from a local authority, had higher estimated inflation compared to the CPI.
The analysis highlighted the importance of considering household characteristics when examining inflation. Certain groups, such as lower-income households, renters, rural households, and those with specific household compositions, faced higher inflation rates than the overall average.
These findings emphasize the need for policymakers to consider the differential impact of inflation on various household groups and address the underlying factors contributing to these disparities.