Mr Donohoe – speaking in Fermoy, Co Cork – admitted that he was very conscious that cost of living issues remain a challenge for many in Ireland – as leading consumer and retail groups expressed alarm at recent price rises, in particular key food price hikes.
The Central Statistics Office (CSO) confirmed that the rate of food inflation since June 2024 has been more than double that of the general rise in prices across the economy.
It has been 4.6pc compared to 1.8pc.
Milk, cheese, butter and beef have also risen significantly in price over the past year – exerting significant pressure on families and the elderly.
Mr Donohoe said he was very conscious of food price pressures on Irish families.
“We will continue to monitor what is happening with the cost of living within our country,” he said.
“Our overall expectation for the year is that we will have a far lower level of inflation than we have had in previous years.
“I appreciate that the cost of living continues to be a challenge for so, so many. But the rate of increase that we are seeing in prices overall within our economy is an awful lot lower than it has been in previous years.”
“The cost of living continues to be a challenge for so many. We are overall seeing inflation levels in our economy that are far more normal than we have seen in many years.
“But just because the rate of increase of prices has slowed down, does not mean that the cost of living pressures that many are facing are any easier.
“I absolutely understand that.”
Mr Donohoe said every budget aims to assist families in whatever way possible.
“Every single budget that a Government brings forward and that the previous Government brought forward does find different ways of helping with cost of living challenges within our society,” he said.
“But we do have to get the balance right.
“We are also living in very uncertain times – we have to be careful with our public finances.”
“We also need to find ways that we can invest more in our future.”
“We do have to move to a more normal budget policy that we have had for a number of years.”
“There is a balance that has to be struck in three different areas – firstly the economic uncertainty that we are in is high. This really affects an open economy that exports a lot. Second, we have really big investment needs that we have to make progress on – really important pieces of infrastructure that we have to build.”
“Thirdly, we have to get the balance right between those two forces and needs and how we help, which every budget does so. But we need to get to a more normal kind of budget than we have had in recent years.”
His comments came after figures showed grocery prices continue to jump, in a move that is blowing a hole in many family budgets, with some meat prices up by 22pc in the past year alone.
Overall prices were up by 1.8pc in the year to June, the latest inflation figures from the Central Statistics Office (CSO) show.
But food and non-alcoholic beverages prices are rising at more than twice the level general inflation, up by 4.6pc in the year to June.
Meat prices are up by more than a fifth over the last year alone.
Today’s News in 90 Seconds – July 10th
The cost of a pound of butter is now up by €1.10 in the year.
Irish cheddar cheese is almost €1 dearer per kilogram since last year, with two litres of full fat milk up by 27c in the year.
Bread prices have also shot up, the CSO said.
Shoppers are also being hit with raging price rises for meat, chocolate and eggs.
The cost of striploin steak is up more than €5 per kilogram in the past year.
It now costs €28.63 per kg, up from €23.37 since June last year. That is a rise of €5.26, or 22.5pc.
This surge in prices means it will no longer be an option for many families to buy such an expensive cut of meat.
But even minced meat has jump in price.
Diced beef is now €13.26 per kilo, a rise €2.42 in a year. This works out at a surge of 22pc.
Roast beef and pork prices are also way up.
Separate recent CSO figures found prices being paid to cattle farmers rose by 50pc in the year to April.
A white sliced ban (88g) is now 6c dearer than last year at €1.67.
A bag of potatoes (2.5kg) is up in price by 29c in the year to €3.81, the CSO said.
Irish cheddar cheese now costs €11.34 per kilogram, up by 95c in the year.
A pound of butter is now €4.83, up €1.10 in a year.
CSO statistician Anthony Dawson said: “There were price increases in June 2025 for a pound of butter (+€1.10), Irish cheddar per kg (+95c), two litres of full fat milk (+27c), an 800g loaf of white sliced pan (+6c), and an 800g loaf of brown sliced pan (+5c).
“There was a reduction in the price of a 2.5kg bag of potatoes (-29c) while the price of spaghetti per 500g remained unchanged when compared with June 2024.”
Food inflation is double the rate of general inflation, with many families being forced to stump up an additional €3,000 a year due to the rise in grocery prices.
The fear is that they will continue rising after separate recent CSO figures found prices being paid to cattle farmers rose by 50pc in the year to April.
Last month, Agriculture Minister Martin Heydon warned that the recent surge in food prices is unlikely to be reversed. He said it reflects farmers’ input costs.
UCC economist Oliver Browne has calculated that grocery prices have increased by 36pc in the past four years.
Last week a farming group blamed politicians for the rising cost of produce, warning consumers that the days of “cheap food” are over.
The Irish Creamery Milk Suppliers Association (ICMSA) also accused politicians of “profound ignorance” as it blamed them for adding cost to food production.
The ICSMA said rising food prices are here to stay.
This week the Dáil also heard allegations of alleged “price gouging” by supermarkets.
Social Democrats TD Jennifer Whitmore said that consumers “have a right to know whether surging grocery prices reflect genuine input cost increases or blatant price gouging”.
The Government said it would set to consider increasing fines for supermarkets found in breach of consumer laws.
Peopl Insurance official Dominic Lumsden said the increases were a worrying trend.
“There are many areas where inflation is running well above average such as for package holidays (up 4.2pc), sports participation (up 8.6pc), taxi fares (up 8.7pc) and private rents (up 4.6pc),” he said.
“Even if general inflation has slowed, grocery prices are continuing to soar, which means many people are struggling to afford their weekly shop.
“Anecdotally, we are hearing about pensioners having to leave their food behind at supermarket checkouts because they cannot afford today’s grocery prices. This is a situation that cannot continue and the Government must do something to tackle grocery inflation so that people can afford to put food on their table.
“But this cannot all be left to consumers. The Government has a role to play here too and it needs to urgently examine what measures could be taken to bring down the cost of living for consumers. The Government has indicated that there will be no special cost-of-living package or energy credits in the upcoming October Budget – if this is to be the case, it is imperative that it introduces other measures to tackle Ireland’s high living costs head-on.”
NFP Ireland head of health and wellbeing, Patrick Brennan, said the surge in health insurance costs was also a matter of worry.
“A key area of concern is the significant increase in health insurance costs, up almost 9pc over the last year,” he said.
“Many health insurance customers are struggling to afford their premiums as a result of high health insurance inflation. Those that need it most – that is, people with a medical condition or illness or elderly people who are becoming increasingly frail – or often afraid to shop around for health insurance in case they compromise their cover in doing so have to re-serve waiting periods.”
Mr Brennan also noted that back to school costs for primary, secondary and third level students are rising with a hike of 4pc over the past year alone.
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