The Economic and Social Research Institute has said the cost of providing extra capital to Anglo Irish Bank and Irish Nationwide will have to be included in the national accounts.
The move would push the Government deficit from 11.5% up to 19.75%, which is by far the highest in the developed world.
In its latest quarterly survey of the Irish economy, the ESRI said money to tackle long-term unemployment is better spent on training schemes than on construction.
Read the ESRI report
The report also indicates that 120,000 people will have left Ireland in the two years to next April.
The ESRI sees little difference to its previous outlook, with the economy broadly flat this year and modest growth next year.
But what has changed is the announcement in March of €12.9bn of extra capital for Anglo Irish Bank and Irish Nationwide.
This injection is by way of promissory note, under which cash can be drawn down over a ten-year period as the institutions require.
The ESRI believes the EU statistics agency, Eurostat, and other international bodies will want that liability written into the national accounts in full this year.
Taoiseach Brian Cowen said Ireland's 'underlying' budget deficit is on track to meet a target of about 11.5% of gross domestic product this year but bank bailout costs could cause a jump.
Mr Cowen said markets have already factored in the injections of capital to Anglo Irish and Irish Nationwide Building Society.
Speaking on RTÉ’s Morning Ireland, Mr Cowen said 'the underlying deficit situation is as planned.'
The main opposition parties have said the report indicated the need to make the generation of jobs a priority.
Fine Gael Finance Spokesman Michael Noonan said it should set alarm bells ringing that the Government's economic strategy of massive bank bailouts and fiscal austerity was not enough to get Ireland working again.
Labour Party Finance Spokeswoman Joan Burton said the survey confirmed the scale of the challenge facing the country in relation to jobs.
She said the Government had been quick to trumpet any sign of economic recovery, but the truth was that there would be no recovery for families until unemployment started to fall.
