An economic forecast to be published by the Government today is expected to say that the economy will continue to grow even in the "severe" scenario of a prolonged conflict in the Middle East.
The Spring Economic Forecast, prepared by Department of Finance officials, will set out three different scenarios - the projections differ depending on factors such as the depth and duration of the Iran war.
The forecast will be published following this morning's Cabinet meeting.
The scenarios - baseline, adverse and severe - will be outlined at the meeting, with Tánaiste and Minister for Finance Simon Harris expected to tell Cabinet colleagues that the Irish economy is projected to continue to grow in all scenarios, albeit at a more moderate pace.
Mr Harris will point to the importance of running budget surpluses and building up financial buffers as a means of protecting the economy at a time of international economic uncertainty.
He will also warn that the conflict in the Middle East has triggered a large energy price shock that is reverberating across other supply chains.
Yesterday, Mr Harris told reporters that Ireland needs to "keep the powder dry" when it comes to economic planning, "for what could be a very difficult winter" ahead.
He did not rule out further energy credits, saying it would be foolish to rule anything out, but added that a balance had to be struck.
Minister for Public Expenditure Jack Chambers is expected to tell today's Cabinet meeting that there is a risk of 'stagflation' by a prolonged conflict in the Middle East where economic growth stays behind higher inflation.
He will warn there is a need for stronger cost controls in Government departments, and that delivery of programmes and initiatives are dependent on Ministers adhering to budget allocations.
Mr Chambers is expected to highlight the importance of reforming processes, generating savings and moderating current expenditure in order to focus investment on capital infrastructure like housing, roads, energy and water.
These investments are the best way to protect jobs and safeguard the economy, he is expected say.
