Expert Warns Public Sector Pay Deal Could Embed High Inflation in Ireland
What happened
A proposed public sector pay deal, agreed between trade unions and the Government, includes a phased 10.75% pay rise for public sector workers over 33 months, which equates to a 3.8% annual increase. Rossa White, chief economist at EY Ireland, cautioned that this deal could embed inflation rates similar to the Celtic Tiger period into the Irish economy.
From irishexaminer.com
Why it matters
White stated that services price inflation has been high for over five years, and pay deals set above inflation targets risk sustaining that trend. This concern follows recent figures showing consumer inflation jumped by 4.3% in one year.
From irishexaminer.com
Who's involved
- WhiteEY Ireland chief economist who warned about inflation risks in the pay deal.
- governmentThe governing body that agreed to the proposed public sector pay deal.
- IrelandThe sovereign state where the public sector pay deal is being implemented.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- IrelandSpeculative
Wage growth might embed high inflation into the national economy.
- governmentSpeculative
Increased public sector wage costs could raise national budget pressure on the government.
- Department of FinanceSpeculative
The deal's cost might strain finance planning due to budget overruns.
- HSESpeculative
Pay deal increases might raise operational costs for major public sector employers.