The government will announce later that the economic recovery is much slower than planned but that a harsher budget for next year is not needed.

Yesterday the Cabinet approved the medium-term statement which will be published later today.

This will outline the current projections for economic growth and the state of the Irish economy.

Up to now the coalition had been projecting growth next year of 2.2%.

Government to cut forecast

But they are now expected to cut this to around 1.5% which is still slightly better than the International Monetary Fund (IMF) forecast which was revised down to 1.1% last week.

The lower growth prospect is not expected to lead to a harsher budget next month.

That is because the coalition is expected to beat the deficit targets from the Troika for this year and therefore getting a head start on the reductions for 2013.