A chief economist with Friends First has echoed the finding's of the group's latest economic outlook report which endorses an end to austerity in Ireland economy.

Jim Power told Newstalk Business Editor Ian Guider that he did not agree with bodies like the International Monetary Fund and the Irish Fiscal Advisory Council, who have both recently said that the government should have continued with austerity.

"I ask myself, 'what planet do these people live on?' We've seen the controversy that the water charges have caused - something that will raise at most €300m. Could you imagine if the government had actually implemented a €2 bn adjustment last October? I would struggle to find where it could come from - other than simply increasing personal taxes again," Mr Power said.

The outlook report comments that there is "no guarantee that a stable government will be possible" after the next General Election - saying that factors like a growing amount of independent candidates could lead to instability, which in turn could affect investor confidence in the state.

Friends First believes that the biggest threats to the Irish economy are:

• The poor economic outlook for the rest of the eurozone;
• The high level of sovereign debt, the high level of SME debt;
• High levels of personal debt, pressure on consumer's disposable income;
• And possible political instability.

Mr Power added that Ireland should not return to austerity, and that the EU should adopt a more"pro-growth" approach to getting the European economy back on track.

The report also found that the eurozone "remains the most vulnerable part of the global economy" - pointing to low price pressure, high unemployment and high debt levels across the monetary union.