Extra Exchequer revenue should be used to build a buffer against future shocks, rather than further boosting an economy that is close to capacity, the acting governor of the Central Bank has said.
Speaking at the MacGill Summer School, Sharon Donnery also warned that a no-deal Brexit could lead to a potentially large depreciation in the value of sterling, which would have a significant impact on Irish exporting firms.
Ms Donnery said that the domestic economy was currently performing well, with interest payments on national debt lower-than-expected, and corporation tax take high.
However she added that "neither situation should be regarded as permanent".
She said any spare capacity in the country's public finances should be used to build a "buffer" against a future shock, rather than being used to boost an economy that was already approaching capacity.
"A clear strategy guiding the use of unanticipated revenue inflows should be promptly established," she said. "Moreover, the reduction of public debt ought to remain a key priority given its very high level. To somewhat labour the analogy, we must 'fix the roof while the sun is shining'."
Ms Donnery also said a disorderly exit by Britain from the European Union would "likely bring considerable volatility to financial markets".
This would include "heightened stress" on Britain's currency, the value of which could fall considerably in the aftermath.
Ms Donnery said the Central Bank had been building resilience in the financial system here over the past decade, with a particular focus on Brexit in recent years.
However she said authorities needed to not only be prepared, but also be prepared to act.
She said there was still a particular risk to the Irish system the economy took a worse-than-expected hit following Brexit.
"A particularly sharp increase in uncertainty or fall in confidence could lead to greater macroeconomic disruption," Ms Donnery said.
She added that the Central Bank's macro prudential tools gave it the flexibility to respond to many shocks.
However she also said that the public finances should be carefully managed now to better prepare the country for a future downturn.