212. Deputy Ken O'Flynn asked the Tánaiste and Minister for Finance if his Department has carried out or commissioned any assessment of the effect of euro area monetary policy since 2015, including the ECB's asset purchase programmes and the subsequent tightening of interest rates, on Irish house prices, rents and the general cost-of-living; if so, the findings of such assessment; if not, the reason; and if he will make a statement on the matter. [75247/26]

My Department publishes forecasts twice annually, which are explicitly conditioned on a number of external assumptions. These inputs include the implied path for monetary policy based on market futures prevailing at the time of the forecasts. As such, each of these forecasts incorporate inter alia the expected impact of interest rate changes on the Irish economy, including rental inflation and prices more generally.

These forecasts are independently endorsed by the Irish Fiscal Advisory Council and published on my Department’s website.

As part of the Budget 2024 Economic and Fiscal Outlook, my Department also published additional scenario analysis conditioned on the ECB’s main refinancing rate rising from 4.5 per cent to 5.5 per cent. This analysis found that the impact of such a tightening of monetary policy was to reduce the level of Modified Domestic Demand by around 1 per cent over the medium term.

The results of this exercise were broadly similar to separate analysis carried out by the ESRI in 2023 and funded by my Department under its Joint Research Programme. This research assessed the impact of tighter monetary policy on the Irish economy, finding that domestic activity and house prices were lower in higher interest rate scenarios relative to baseline. This analysis is available at the link below.

www.gov.ie/en/department-of-finance/publications/interest-rate-snapback-and-the-impacts-on-the-irish-economy-august-2023.