The Minister for Public Expenditure and Reform has said the government will make budgetary decisions based on the needs of the whole of society. Brendan Howlin was speaking after the Economic and Social Research Institute (ESRI) issued a report which recommends the government stick to the planned €3.1 billion worth of cuts in the October Budget.

That is despite calls for an easing of austerity by trade unions and employers.

The economic body says that under a scenario where the EU economy does not return to growth in the near future, the Irish economy would struggle to grow at 1% a year over the second half of the decade.

It adds that under this same scenario the unemployment rate in 2020 would remain where it is today. It says that in order to keep borrowing under control, continuing tough Budgets would be needed until the end of the decade.

It says that because of this uncertainty, a 'no regrets' approach to fiscal policy would entail implementing the planned €3 billion in cuts in the 2014 Budget.

The ESRI believes that failure to implement the planned Budget would leave a need for some cuts at a later date and that the failure to make the adjustment for next year would leave a very big adjustment to be done in 2015 and 2016.

Minister Howlin says the government will wait to see the final taxation and expenditure figures later this year before making budgetary decisions.