The Finance Minister has told the Committee on Finance, Public Expenditure and Reform that the economy is expanding again and growth should be on target.
However, Michael Noonan said external growth had deteriorated over the summer months.
The committee is considering allocations for public expenditure for 2013.
Mr Noonan said Ireland was moving in the right direction and he said that the 2011 deficit was within the limit set by the EU/IMF.
The Minister said that national debt and personal debt were the main drags on the domestic economy.
On mortgage arrears, Mr Noonan said the banks had been slow to move on recommendations. But he said he believed they were moving on them now. He added that the banks did not pay enough attention to arrears.
Mr Noonan also told the committee that the property tax will be introduced in the December Budget. He said it was likely to date from July next year.
On the bank debt deal, he said the June agreement was contingent on the banking supervision mechanism being in place by January 2013.
