'Poor budgeting' - Government spending rising faster than expected, warns IFAC
The Irish Fiscal Advisory Council said "poor budgeting" was mostly to blame.
It said current spending is up 6% so far this year, which was well above the 1.4% outlined in the Budget.
It added: "This is because earlier overruns weren't properly built into the latest forecasts."
It said while the Government is running a surplus, if excess corporation tax receipts and recent economic buoyancy were stripped out, there was a structural deficit equivalent to €2,500 per worker.
It also called for the Government to set spending ceilings for each Department as it was legally required to do.
The council was critical of the Government for not setting out any clear plans for a domestic spending rule - which would outline a limit for spending increases.
It said: "With forecasts covering only the next 20 months, Ireland still lacks a proper medium-term fiscal strategy."
It has also called for the Government to use budgetary policy to reduce the ups and downs of the economic cycle.
It said: "This means showing restraint when the economy is strong. It also means providing support when the economy is struggling."
IFAC Chairman Seamus Coffey said: "The Irish economy is in a strong position going into a period of uncertainty."
The council has also predicted that the revenue from corporation tax is likely to increase in the short term.
It said this was due to corporation tax going up for large companies from 12.5% to 15%.
It added that it would also rise as pharmaceutical companies had been excluded from US tariffs so far and exports from drug companies had recently risen significantly.
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