Prices in Ireland went up by 1.8 per cent in the 12 months to February 2025, according to the Central Statistics Office (CSO).
The figures show that inflation, the rate at which prices are rising, has ticked down slightly since January when the annual rate was at 1.9 per cent.
The CSO monitors price changes over the previous 12 months to calculate inflation.
Inflation soared in 2022 to reach 9.2 per cent, mainly due to greater demand for oil and gas after the Covid pandemic. Energy prices surged again in the aftermath of Russia's invasion of Ukraine.
It then remained well above the European Central Bank's 2 per cent target partly because of high food prices.
Some parts of the economy are still experiencing substantial price jumps.
The most significant increases in the year to February were in restaurants and hotels, up 3.1 per cent, reflecting higher prices for food and drinks consumed in pubs, restaurants and cafes.
There were price increases over the 12-month period for a pound of butter (up 70 cent), Irish cheddar per kg (up 50 cent), two litres of full-fat milk (up 26 cent) and spaghetti per 500g (up 3 cent).
The cost of a white sliced pan bread loaf was unchanged compared with February last year.
The figures come days after the European Central Bank (ECB) decided to cut interest rates to 2.5 per cent at its latest monetary policy meeting.
Falling interest rates will lead to cheaper borrowing for consumers, though savers will see lower returns.
In June last year, the ECB cut its main interest rate from an all-time high of 4 per cent to 3.75 per cent, the first fall in five years.
It cut rates again to 3.5 per cent in September 2024, to 3.25 per cent in October, 3 per cent in December and to 2.75 per cent in January this year.
Robert Purdue, head of dealing at global financial services firm Ebury, said that while Ireland’s inflation rate remains low, the latest figures suggest that concerns about rising inflation are still potentially on the horizon.
“The data comes just one week after the ECB announced another 25 basis point rate cut, which is likely to provide some relief to Irish businesses," he said.
"However, ECB President [Christine] Lagarde’s recent remarks on policymakers grappling with 'exceptionally high' uncertainty, cast fresh doubts over the pace of potential future rate cuts and inflationary pressures."
"Additionally, following the recent tense meeting between the Taoiseach and US president Donald Trump, Ireland’s vulnerability to the potential consequences of European tariffs and US trade policy remains unclear.
"As the Irish economy’s recovery is still largely driven by export growth, businesses must remain vigilant in this turbulent economic and geopolitical climate."
Last month the Taoiseach indicated that there were no plans to continue energy credits or introduce a new cost-of-living package in the next budget.
Energy credits were included in last year’s budget in October as part of the Government’s response to inflation and cost-of-living challenges.
It was announced that all domestic electricity customers would get €250 off their electricity bills through two instalments. Similar measures had been announced in previous budgets.
However, Taoiseach Micheál Martin ruled out continuing the measure because "inflation has come a way down."
Previous budgets included one-off additional payments for those receiving a range of other allowances, such as child benefit, disability allowance and fuel allowance. There were also tax measures including the renters’ tax credit.
Mr Martin did not specify if these measures would be affected.
