THE national debt is set to peak at 124pc of the value of the economy at the end of this year before beginning to fall back in 2014.
Finance Minister Michael Noonan said the shortfall in public spending would fall to 4.8pc of gross domestic product next year – well within the target laid down by the troika of 5.1pc.
Some €42bn is expected to be brought into the State next year in taxes and non-tax revenue, while €49.6bn has been set aside for government spending.
"This debt ratio is very high and reducing it must be a key priority," Mr Noonan said.
"The first step is to reduce the amount being borrowed and ultimately to cease borrowing, particularly for day-to-day spending.
"The effectiveness of the steps we have taken since entering office, including in this Budget, are visible from the small primary surplus that is forecast for next year; in other words, excluding the interest burden, we are paying our own way again."
Mr Noonan said the debt ratio would begin to decrease from next year, reaching 120pc at the end of 2014, 118.4pc at the end of 2015 and 114.6pc at the end of 2016.
Health and Social Protection account for the biggest spending departments, with €13.3bn set aside for health.
On the tax side, €4.82bn is expected to be brought in via excise with the hike in the price of a pint and a bottle of wine, up from €4.72bn this year.
Income tax will be up to €17bn from €15.73bn, reflecting the expectation that employment will grow by about 1.5pc this year and in 2014.
Corporation tax is expected to rise to €4.38bn from €4.36bn this year, while the local property tax is due to take in €550m.
Mr Noonan also said that the softer €2.5bn adjustment had pushed the growth projection for next year to 2pc from 1.8pc, although growth this year would remain largely flat.
But the open nature of the Irish economy means we are heavily reliant, and therefore heavily impacted, by what happens in our trading partners, including the UK and the rest of Europe.
And the fragile nature of our recovery means that an external shock can knock forecasts off target.