The cost of living is expected to continue to climb this year as the Economic and Social Research Institute (ESRI) predict inflation will average 6.7 per cent for 2022.
In its latest Quarterly Economic Commentary, the institute said Russia's invasion of Ukraine will have "a negative impact on global economic activity and further exacerbate inflationary pressure which had already been accumulating".
The ESRI added that the longer the war continues, "the greater the degree of uncertainty".
The rise in the rate of inflation, leading to an increase in the cost of living, "will pose significant challenges for households," the report states.
The report adds that the fallout from the war in Ukraine "also poses major questions concerning the future sources of energy used across Europe".
For the year, Ireland's Gross Domestic Product (GDP) is expected to grow by 6.2 per cent, alongside Modified Domestic Demand (MDD), which is predicted to increase by 5 per cent.
Unemployment is also likely to continue to fall to 5 per cent by the end of the year, which will positively impact public finances.
The ESRI predict the General Government Balance (GGB) will be positive for the first time since 2019, but warns there are "significant downside risks for the public finances owing to the geopolitical crisis".
Commenting on the report, Kieran McQuinn from the ESRI said: "While the outlook for the Irish economy is still positive in 2022 and 2023, the impact of the Russian invasion of the Ukraine will lower the expected growth rate of the Irish economy and lead to higher rates of domestic inflation."