'Intensified effects of the war in Ukraine' behind Eurozone inflation, says Donohoe

Minister for Finance Paschal Donohoe said the Government appreciates how difficult high energy prices are for people
'Intensified effects of the war in Ukraine' behind Eurozone inflation, says Donohoe

Olivia Kelleher

Minister for Finance Paschal Donohoe has said the Eurostat estimate that Ireland's Harmonised Index of Consumer Prices (HICP) measure of inflation rose to 8.2 per cent in May was always considered possible given the "intensified effects of the war in Ukraine".

Speaking to RTÉ's News at One, Mr Donohoe said Eurozone inflation figures were always subject to change due to the impact of the war in Ukraine.

“We did indicate in our forecast, which we published in April, that it was possible due to the intensified effects of the war in Ukraine that our inflation forecast may change as the year goes on and in the forecast that we published a few weeks ago we did indicate that is possible and we published a second scenario," he said.

Mr Donohoe said the Government appreciates how difficult high energy prices are for people and acknowledged concern about a further rise in prices given the decision by the EU to ban imports of two thirds of Russian oil.

"Care has to be taken when publishing a new set of sanctions that are absolutely justified and needed but will also have economic effects. What the Government is looking to do is accelerate the plans we have in place to increase our energy security, to increase the share that renewable energies provide of our total energy mix.

This is why [Minister for the Environment Eamon] Ryan is considering proposals now for seven new wind farms for our country. It is why last week he announced results in relation to new options for solar energy and why we have plans for smaller renewable energy generators across the country.

"We acknowledge that the world of energy is changing and it is why we are accelerating our plans to drive our share of renewable energy in meeting the energy needs of the country."

The Minister said whilst every effort is being made to help people impacted by rising costs, caution would be needed: "I do need to get the balance right so what I do now doesn’t create further difficulties and challenges for us tomorrow.

"That is why we have brought in a range of measures to help - some measures that are targeted and other measures to help all with the rising cost of energy."

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