A leading economist expects tax receipts to come in €2 billion ahead of the Budget target for this year.
Bank of Ireland's Dan McLaughlin, in his latest economic outlook, is also predicting economic growth of up to 6% this year, well ahead of most recent forecasts and up from his previous 4.5% prediction.
The economist says the global economic recovery has turned into a boom in some countries, meaning that the international backdrop is the most positive faced by the Irish economy for some years.
Dr McLaughlin expects growth in consumer spending, investment and exports to accelerate, but he has raised his inflation forecast for this year to 2.3% to take account of higher oil prices.
On the public finances, the economist says the surge in tax receipts will leave an Exchequer deficit of just €600m, compared with Charlie McCreevy's prediction of €2.8 billion at Budget time.
Dr McLaughlin says this opens the way for a more generous tax package in 2005, after two successive years in which income tax rates were effectively raised in real terms.
On the labour market, he says the pace of employment growth has quickened, and he predicts an unemployment rate of 4.4% for the year. But he warns that there will still be job losses in manufacturing as an 'inevitable' result of free trade and globalisation.
