FINANCE Minister Michael Noonan has signalled that any eventual let-up in austerity could come through boosting capital spending rather than tax cuts.
As the Department of Finance fractionally revised down its growth projections for the year, Mr Noonan said there was €1bn in savings each year from 2014.
The minister said the Government will stick to its budget targets for the year, but said he hopes some financial flexibility may emerge "as the year goes by".
"It seems to me that it's much smarter to use a lot of this, if we're going to use it, on capital rather than current," Mr Noonan told the Oireachtas Finance Committee.
"But I'm not sure whether we should press on with the adjustment next year and do something later.
"It would depend on the way the year develops, and how we use it best to restore the economy and grow the economy."
The Department of Finance cut its growth projections this year to 1.3pc from 1.5pc forecasted at December's Budget on the back of a downward revision to overall export growth.
Earlier, Central Bank governor Patrick Honohan said it was the bank's view that the austerity plan must be adhered to.
"What was agreed with the troika was not beyond what we would have been recommending," Mr Honohan told the Oireachtas European Affairs Committee.
"In fact it might have been better to do it a little bit faster, to have it all done now. I'm not saying go any further, I'm just saying get it over with."
"Can you get away with any less and the answer is we can't."