The Budget will be based on economic growth of 5% this year, Finance Minister Michael Noonan said today. 

His comments follow CSO figures yesterday, which indicated that the economy expanded by 26% in terms of GDP in 2015. 

Mr Noonan said the factors that led to the enormous growth figures had a "minimal" impact on the real economy. He said the best data were figures for job creation. 

But the minister said that despite the big jump, GDP remained the valid denominator to assess Ireland's debt sustainability.

He said he expected investors would "work with" the debt-to-GDP ratio that will fall to around 75% this year and not the 88% originally estimated.

"We're not making any decisions on an economy growing at 26%, we're making decisions on forecast growth of 5% this year and the increase in employment and tax revenue is consistent with that," Mr Noonan told a news conference today.

Meanwhile, the Government has pencilled in spending increases of 3.5% annually between this year and 2021. 

Minister for Public Expenditure and Reform Pascal Donohoe said spending would total €57.6 billion in 2017. 

He said the €870m increase would be used for pay increases under the Lansdowne Road agreement, new capital expenditure and keeping up with population growth. 

It means spending will increase by 3.1% next year. 

"We must continue to pursue a prudent path," the minister stated.

He made his comments at the release of the Government's Mid Year Expenditure Report

The report - the first - is a key part of the reformed budget process that began with the publication of the Summer Economic Statement last month and continued with the National Economic Dialogue in June.

In a statement, the Department of Public Expenditure and Reform said the report presents the baseline for departmental expenditure and provides the starting point for examination of budgetary priorities by the Oireachtas.

Minister Donohoe told a press conference today that the recovery in Ireland is now well established. 

"The economy is growing strongly, unemployment is falling to below 8% and the public finances are moving into balance," he added.

Minister Noonan also told the press conference that he expects a decision on Apple's tax arrangements with Ireland would be made by the European Commission in September or October. 

He said he would wait and see if it is "adverse or not" to Ireland.