The leader of the Labour Party, Pat Rabbitte, has warned that Ireland's economic performance is not as robust as is claimed by the Government.

Speaking to the Association of European Journalists today, Mr Rabbitte said that, with inflation rising and exports falling, there is a danger that the economic train will hit the buffers.

Mr Rabbitte said that for the first time in 20 years Ireland is no longer paying its way in the world. He said Ireland's trade and international deficit stood at €13 billion, which he claims is a clear sign that the economy is being overheated by borrowed money.

The Labour leader said previous Fianna Fáil governments under Jack Lynch and Charlie Haughey had left the biggest public debt burden in Europe, and that their successors were talking up the creation of the biggest private debt.

Mr Rabbitte warned that Ireland could not take a continued strong economy for granted, and claimed the current coalition was complacent to the point of smugness about the situation.