Consumer price inflation in Ireland eased significantly in May, driven by a decline in energy costs, according to preliminary data released on Tuesday by the Central Statistics Office (CSO).
The flash estimate of the Harmonised Index of Consumer Prices (HICP) showed that inflation slowed to 1.4% year-on-year, down from 2% in April. Core HICP, which excludes the more volatile energy and unprocessed food categories, also moderated, falling to 1.8% from 2.5% the previous month.
The figures indicate a continued cooling of inflationary pressures, with energy prices estimated to have fallen by 1.3% in May alone, and by 2.6% over the past 12 months. The drop in energy costs comes as a relief to consumers and policymakers, who have been grappling with the impact of elevated prices since 2022.
Despite the easing in overall inflation, food prices continued to rise, climbing 1% on a monthly basis and 4.1% compared to the same time last year. Meanwhile, transport costs dropped by 3% in May and are now 2.4% lower than a year ago, contributing further to the overall slowdown in price growth.
The latest data comes ahead of the European Union’s official flash estimate for eurozone inflation, which is due to be published by Eurostat on June 3. Analysts expect a similar trend across the bloc, potentially reinforcing the case for a shift in monetary policy.
In Spain, preliminary figures released Tuesday revealed that inflation dipped below the European Central Bank’s (ECB) 2% target in May, further strengthening expectations that the ECB may begin easing interest rates. Spain’s data is being closely watched as a bellwether for broader eurozone trends.
The slowdown in inflation in Ireland and other eurozone countries is likely to be welcomed by the ECB, which has raised interest rates sharply over the past two years in a bid to bring inflation back under control. While the central bank has signalled caution, declining price pressures could pave the way for rate cuts in the coming months.
The final HICP figures for Ireland will be published in mid-June.
