Finance Minister Paschal Donohoe has warned of possible "capacity constraints" in the labour market if the unemployment numbers continue to drop at the expected rate.
While the Government doesn't expect a situation to arise where there won't be enough workers to fill available jobs, Mr Donohoe said the scenario is something ministers would have to "reflect on".
He hailed the drop in unemployment from a height of more than 15pc, down to 6.4pc and said it's feasible it will drop to 5.5pc.
He said this would be an "extraordinary achievement" but that it's possible the country could "experience capacity constraints".
Such a scenario could lead to workers coming in from abroad and an increase in wages, though Government sources stressed Mr Donohoe was outlining a "potential situation" and said they don't envisage this will happen.
Mr Donohoe was delivering a briefing on his priorities now that he heads up both the Departments of Finance and Public Expenditure and Reform, including balancing the Budget next year and extending the Lansdowne Road pay deal.
In terms of Budget 2018 he intends to honour the Programme for Government commitment to reduce taxes on work in a "sustainable" way and will be working with Fianna Fáil to achieve that.
Mr Donohoe has asked officials to explore how Taoiseach Leo Varadkar's proposal to merge the USC and PRSI into one social insurance payment can be done. He said it's a commitment that would "take a number of budgets".
Mr Donohoe said commitments have been made to increase spending by around €2bn due to demographic pressures, public pay commitments and capital investment plans.
Labour TD Joan Burton has criticised a delay in the Summer Economic Statement, arguing it undermines efforts to reform the budgetary process.
It could be delayed by up to four weeks.
Mr Donohoe's spokeswoman said it will be published in the coming weeks.