The Government has warned of possible job losses if wages rise faster than in other countries. It says any salary hikes should be matched with higher productivity.
The Economic Review and Outlook, published by the Department of Finance this afternoon, says the issue is particularly important as the social partners begin talks on a new wage agreement this year.
The report left growth forecasts little changed, despite speculation that it would lower the figures. It said it expected gross national product to expand by 5% and gross domestic product to grow by 5.1%. Inflation is forecast to average 2.4% this year, with the harmonised EU measurement running close to the EU average at 2.2%.
The Government has said it expects an Exchequer deficit of €2.7 billion this year, around €300m lower than the estimate at Budget time, despite costs linked to the refund of nursing home charges. The Exchequer has been boosted by money from Revenue investigations.
But the review warned that the present high level of oil prices, if sustained, could result in slower international growth.
