The rate of inflation is expected to fall at a much faster rate this year than previously expected.
The government believes inflation will average between 4 and 5 per cent across the year.
At the time of the Budget last September, the government anticipated the annual rate of inflation for this year would average around 7 per cent, with the annual rate falling to 4 per cent in the final quarter of the year.
Addressing the Irish Tax Institute, the Minister for Finance said the downward revision of the figure is due to oil and gas prices falling steeply.
Minister Michael Mc Grath said it is clear the world is facing into another year of considerable uncertainty. As a small, open economy Ireland he said is particularly exposed to risks in the global economy. However, he said it appears as though the outlook may not be as pessimistic as had been originally thought.
He said on the international front, incoming data suggests that the global downturn may not be as severe as previously assumed.
Domestically, he said despite the challenges weighing on economic activity, the Irish economy has proven to be remarkably resilient.
