A leading think-tank has said the Government should press on with savings of 3.1 billion euro in next week's budget.
The Economic and Social Research Institute (ESRI) forecast the domestic economy could grow by as much as 2% this year - the most optimistic outlook to date.
"We continue to hold our view that the most prudent course of action in the 2014 budget is to implement a fiscal adjustment amounting to 3.1 billion euro," said the ESRI.
But the advice looks set to be ignored by Finance Minister Michael Noonan, who has indicated the savings in Budget 2014 will be down to about 2.5 billion euro.
The ESRI said it was particularly hard to gauge the health of the economy this year.
"Many of the key indicators that one would normally rely on are affected by special factors," it said.
However it said the clearest signal of what was happening on the economic front was the growth in employment over the year.
It noted the fall in the numbers signing on the live register - down 20,665 in the year to September - which it said showed a consistent reduction over the nine months of the year.
"These statistics, and a detailed examination of what lies behind all the other indicators, underpin our forecast of 2% growth in GNP this year," said the ESRI.
The economic figures differ hugely from what the Central Bank predicted in i ts latest quarterly bulletin, where it cut its previous economic growth forecasts for gross national product, the Irish only end of the economy, down to 0.1% growth for this year and 1.2% next year.
It warned that figures on the value of industrial output, exports and therefore gross domestic product are driven by an exceptional fall in the profitability of the pharmaceutical sector. It said this was linked to the patent cliff where market protections for some medicines expire.
The ESRI said it was using GNP to assess the state of the economy as it would be largely unaffected by the se special factors.
But it warned that next year's economic performance will depend on what happens outside Ireland, with a bounce for the e urozone economy likely to bring about growth at home of about 2.7%.
With the budget just one week away, the ESRI said it a nticipates public finances will come in ahead of target this year.