Inflation has peaked and will be lower this year than previously expected, Finance Minister Michael McGrath has said.

A drop in wholesale energy costs means the pace of price increases will fall back to between 4pc and 5pc this year, he said.

That is well over the rate before the Russian invasion of Ukraine but significantly under the 7pc to 8pc forecast when Budget 2023 was announced, he said in a speech delivered at the Irish Tax Institute annual dinner in Dublin on Friday evening.

On the international front, incoming data suggests that the global downturn may not be as severe as previously assumed, he said.

Domestically, despite the challenges weighing on economic activity, the Irish economy has proven to be remarkably resilient and is poised for growth in the second quarter of the year, he said.