The recent fall in energy prices is likely driven by the drop in wholesale energy costs in March.

Meanwhile, shoppers witnessed a 0.5% increase in food prices in April and an annual increase of 13%.

The annual rate of inflation has fallen from 7% in the 12 months to March but many households are still feeling the pinch.

‘Two-track economy’

A separate Credit Union Consumer Sentiment Index published earlier this week suggested Ireland has “two-track economy” in terms of the financial wellbeing of Irish consumers.

“In the past year, there were significant increases at both ends of the spectrum-in the number of Irish consumers coping reasonably comfortably with their financial circumstances, but also in the number of financially stretched consumers who have reached the point where they would be entirely unable to manage a further financial mishap,” said economist Austin Hughes.

The figures from the CSO are based on harmonised figures that make it easier to compare inflation rates across the eurozone by using the same basket of goods and services by way of comparison.

The inflation figure for the euro area is expected shortly before the ECB introduces another rate hike on May 4 to try and drive down sticky inflation. Some have predicted policymakers will introduce a 25 basis point increase while other analysts have said a 50 basis points hike is still being tabled.

The European economy is doing better than expected even if core inflation is taking longer to slow, EU Economy Commissioner Paolo Gentiloni said.

“This is encouraging news, which shows the EU economy continues to show resilience against a challenging global backdrop,” Mr Gentiloni said.

• Additional reporting by Bloomberg