The Central Bank has warned that borrowing has exceeded incomes.
In its quarterly bulletin, the Central Bank said mortgages and other borrowings have exceeded incomes in Ireland for the first time.
It said borrowers would be vulnerable if they lost their jobs or if there was an increase in interest rates.
However, it went on to say that the economy would continue to grow. The bank is forecasting GNP growth for 2005 of about 4%. However, it also says there are risks from high oil prices and the strong euro.
The Central Bank says inflation must be kept at its current low level, but is predicting a modest increase in inflation in the services sector this year.
It also says that the unemployment rate could drop to about 4.25% this year from 4.5% last year.
Fine Gael leader Enda Kenny has called for financial 'discipline' and advice for people not to get out of their depth in borrowing.
Mr Kenny said it was 'perfectly obvious that people in this country are borrowed up to the hilt'.
