The fiscal watchdog has given its approval to the Government's budget plan, but has warned against any move to increase the package.

In a pre-budget statement, the Fiscal Advisory Council says proposed tax cuts and spending increases of between €1.2bn and €1.5bn is economically prudent.

But it also noted that it is at the higher end of the acceptable range and says the government should stick to the plan in order to protect the economy from potential future shocks.

Chief economist at the Fiscal Advisory Council, Thomas Conefrey, says the package of cuts and spending is "broadly appropriate".

But he says it is important for the government to balance their tax cuts against the amount needed for public services.

"The State faces some considerable expenditure pressures over the medium-term - so related to Ireland's demographic structure changing, and also just increases in the costs of providing existing levels of public services" he told Newstalk Breakfast.

"So given those pressures, there is a need therefore to be mindful and ensure that the tax base is respected" he added.

And he believes the budget has to be considered in the wider context, saying: "It is really important that the focus is not just on specific measures or people who might benefit...but over the longer run, are these measures consistent with ensuing the public finances and the economy remain on a straight path".