Households are in line for the biggest drop in living standards in more than a decade, according to the Central Bank.
The regulator's warning rising prices will hit disposable incomes, which it expects to fall by an average of just over 3% in 2022.
It's forecasting inflation to top 10 percent this year, and average at 7.8 percent, but expects that to fall to 4.2% next year.
However Deputy Governor at the Central Bank, Mark Cassidy, says the war in Ukraine means there a lot of uncertainty with that.
"For June the household inflation register is currently running at around 9.5%, that's the highest rate in 40 years.
"We think the average inflation rate this year will be around 7.8%, falling to just over 4% next year, and 2.1% in 2024.
"Very importantly, I would emphasise there is very considerable uncertainty around those forecasts, particularly relating to events in Ukraine."
