It's believed rising interest rates by the European Central Bank will help to eventually settle inflation.
The Central Bank of Ireland is making the claim as it anticipates inflation could peak at over 10% this year.
It is forecasting average inflation of 7.8% in 2022, but that's expected to fall to 4.2% next year.
Deputy Governor at the Central Bank, Mark Cassidy, explains why there could be a drop in inflation:
"We have tentative evidence of this already, a continued easing of some of the disruptions to global supply chains. Also normalization of demand, following a very strong post COVID recovery, but also reflecting that household spending power has been reduced over the medium term. Also, we think that the European Central Bank, monetary policy actions or their actions and interest rates will help inflation to settle at lower and more stable rates."
