DUBLIN-Irish consumer price inflation rose again last month after slowing in June, according to official data published on Thursday that renewed concerns about the health of Ireland's economy.
Ireland's consumer price index (CPI) rose 0.3 percent in July to stand 5.0 percent higher than a year earlier-above the median forecast of a 4.8 percent rise from a Reuters poll of seven economists.
It was the fifth time this year that headline CPI has been at or above the 5.0 percent mark and came a day after a survey showed consumer sentiment had fallen to its lowest level in nearly four years.
"It is not good news," said Bloxham Stockbrokers' Chief Economist Alan McQuaid.
"I think a lot of the media focus has been on the housing market and the possible negative effects of ... construction sector weakness. But I think this is a more serious issue in the sense that headline inflation has been in and around 5 percent for the whole of the year."
Irish economists have chopped their forecasts for 2007 house price growth as the country's property market cools after a decade of staggering gains.
House prices, which have more than quadrupled since the economy began to boom in the late 1990s, fell for the first time in over five years in March and have continued to drop.
Local media reported on Thursday that property developers were offering incentives such as a free car in a bid to attract more buyers.
"The government cannot afford to let inflation remain this high especially with the euro trading at record highs against the dollar and the yen so it is making life tougher on exporters," said McQuaid.
"I think what is going to happen is that growth forecasts next year may be higher than people are assuming, but inflation will also be higher than people are expecting."
The CPI hit 5.2 percent in January, its highest since June 2001 and economists expect it to average 4.8 percent this year.
In July, the Harmonised Index of Consumer Prices (HICP)-used for Europe-wide comparisons-fell 0.2 percent last month and was 2.7 percent higher year-on-year, Central Statistics Office figures showed. That was slightly lower than June's rate of 2.8 percent and broadly in line with than economists' forecasts.
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