Central Bank Governor Patrick Honohan has repeated that he believes the bail-out of Anglo Irish Bank is 'costly but manageable'.
The inclusion of the costs of the Anglo rescue in the State's accounts could push the country's budget deficit close to 20% this year.
Speaking in Hong Kong, Professor Honohan reiterated that Ireland's budget deficit this year would be around 20% of its annual GDP. The cost of restructuring Anglo has pushed up Ireland's deficit estimate.
Mr Honohan said he expected that additional cost to be included in the national accounts this year. But it is understood the Government has yet to make a final decision about this, and is awaiting European Commission approval of Anglo Irish Bank's restructuring plan.
The EU last week approved plans for up to another €10 billion of funding for Anglo Irish. Professor Honohan said on Sunday that plans to recapitalise the bank were well on track and had little impact on the Government's overall deficit plans.
He said Ireland remained committed to its target of reducing its budget deficit to 3% of gross domestic product by 2014.
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'It's a very high deficit measured this year because we're taking the hit, we're acknowledging the losses in the banking system and those losses which are being paid for by the government have to be included in the deficit,' he said.
