The Taoiseach says the Government intends to continue with what he called a 'significant' capital investment programme in the National Development Plan.
Brian Cowen said there would be no change in the Government's overall strategic approach.
However he added that all Government policy has to be in the context of fiscal and budgetary management of the economy.
Mr Cowen was asked about whether a shortfall in Government funds was likely given the cut in growth forecasts from 4% to 2%.
He pointed out that Government spending involved both capital and current spending.
Mr Cowen said he had made it clear that the rate of growth in current spending would have to moderate in the context of tax revenues not being as buoyant as they previously were.
He said the NDP was predicated on growth forecasts averaging 4% over the life of the plan up to 2013.
He accepted it would be more difficult in the immediate future to achieve growth rates, but in the medium term he expects to resume those growth rates when the economic climate improves internationally.
He said that what was important for Ireland as a country is that we continue to invest in the productive capacity of the country so that when the upturn comes we are in a position to avail of it.
In the Dáil today, Minister for Health Mary Harney insisted that the Taoiseach's comments yesterday about the NDP were in line with the statement in the plan that spending must be in line with prudent budgetary policy and the Growth and Stability Pact.
Labour's Joan Burton said Mr Cowen's comments signalled a 'huge change in the economic policy of this country,' and was a 'disaster' for the planned Metro for Dublin north and west.
