The Department of Finance expects that the Irish economy will continue to grow strongly in the coming years with both GDP and GNP to increase by 5 per cent per annum between 2006-2008.
The data is included in a Pre-Budget Outlook, a new feature of the Government budgetary process that Minister for Finance Brian Cowen announced in his Budget speech last December.
Minister for Finance Brian Cowen
The report looks at the economic outlook for 2006-2008 - which the Department says is "broadly positive" and has caused it to revise its forecasts for this year. It now expects GDP to grow by 5.25 per cent and GNP to grow by 5.75 per cent in 2006.
As a result, the Department is projecting an overall surplus of 1.0 per cent of GDP in 2006 followed by projected surpluses of 0.4 per cent and 0.2 per cent in 2007 and 2008. It advises that these figures will change based on the final estimates of expenditure and Budget day decisions.
On the basis of these figures the debt ratio would decline from 27.25 per cent of GDP in 2005 to 25.5 per cent of GDP in 2008.
The document also shows that following 4.6 per cent employment growth in the first half of the year, the level of employment exceeded two million for the first time in the history of the State.
The Department forecasts that employment will grow at an average 3 per cent per annum over the next three years.
Mr Cowen said: "My department's economic projections for growth over the forecast period are appropriate to an economy at full employment and achieving its potential rate of growth.
"There are risks on the international scene of lower growth and variable oil prices but the prudent fiscal policies that this Government has followed give us the flexibility to cope with such risks."