While this is first and foremost a humanitarian tragedy for the Ukrainian people, the economic consequences of the war are being felt across Europe through higher inflation, as well as greater uncertainty and negative sentiment effects. Ireland will feel these effects, albeit not as directly as some other European countries.
Headline inflation is projected to average 6.5 per cent this year, reflecting particularly high energy price inflation.2  The effects of inflation will be felt across the Irish economy, although more strongly for some households than others.3 Cost of living increases from higher food and energy prices tend to be proportionally larger for lower income, older and rural households, who typically spend more of their weekly outgoings on these products.