A supplementary Budget may be needed in early 2020 to respond to Brexit, according to the ESRI.
The group has released its latest Quarterly Economic Commentary, which warns the Irish economy could face a sizeable and immediate shock if the UK crashes out of the EU without a deal on 31st October.
According to the report, the economy is set to perform 'robustly' this year with a GDP increase of 4.9% - with 3.1% growth forecast for 2020.
However, that level of growth is based on the assumption that Brexit won't happen next month.
The ESRI says it's "not inconceivable" that the Irish economy could instead contract in 2020 if there's a no-deal Brexit.
It acknowledges that such concerns make "the choice of the appropriate policy mix for Budget 2020 particularly complex".
The Finance Minister Paschal Donohoe has already confirmed next month's Budget is being prepared on the assumption of a no-deal scenario.
However, the ESRI says a supplementary Budget may be required in early 2020 if "external conditions change substantially".
ESRI senior researcher Conor O'Toole explained: "It is very clear when we model a no-deal, disruptive scenario that the economic shock is sizeable and will be immediate to the Irish economy.
"One of the warnings that we're putting in the current commentary is that if that happens, and there is a disorderly no-deal immediately... we could well have a contraction in economic activity next year."