It has been confirmed that the HSE will need a budget bailout of over half a billion euro this year.

The latest Exchequer returns show the health service overspent by €324m in the first nine months - and its overspend is set to increase before the New Year.

It will be the ninth time in 11 years that the agency will have overspent its budget.

However Public Expenditure minister Brendan Howlin says the issue is understandable - and every developed country has difficulty controlling its health budget, and will find that task increasingly difficult in coming years.

“Health inflation is much higher than normal inflation, new services and products are coming on stream (and) thankfully we’re living longer.

“It’s going to be an ongoing challenge for every developed country to adequately resource and provide a decent healthcare system."

Mr Howlin also admitted he is surprised at the speed of Ireland's economic recovery.

He was speaking after the Department of Finance said it expected the economy to grow by 6.2 per cent this year.

The Department also released the Exchequer figures for the first three quarters of the year, showing the public finances are 4 billion euro better off than a year ago.

Mr Howlin said the current rate of growth couldn't have been predicted four-and-a-half years ago.

“We would have given our right arm some years ago for a projected growth rate of 6.2% by 2015. When we set out on the journey four and a half years ago we were picking up the bits of a broken economy, we certainly didn’t expect things to work as well as they have done, in terms of the speed of the recovery,” he said.