TAOISEACH Enda Kenny believes the economy could start creating jobs again next year.
He made the prediction after ESRI Research Professor John Fitzgerald's presentation at the party's two-day think-in in Galway.
Mr Kenny also said his Government would only be able to avoid increasing income tax after holding new negotiations with the EU and the IMF.
He spoke during a press conference to mark the end of Fine Gael's pre-Dail get together in Galway.
He said: "Professor John Fitzgerald gave a very optimistic report in respect of the Irish economy.
"He was clear in his understanding of the change in perception arising from the decisions made by the Government to date, such as changes in the restructuring of the banks, and the Government's agenda of job creation in the jobs initiative.
"Exports are improving, the trade surplus is rising, and we would hope, following our presentation from Professor Fitzgerald, that next year will see the start of employment actually increasing.
"We hope that by implementing our Programme For Government we will change the fortunes of our people and our country."
Unemployment currently sits at 14.4pc, with 469,713 people on the dole.
The Taoiseach said he was sticking to his election pledge that taxes will not increase, but he said his Government would have to renegotiate the bailout deal with the EU and IMF first.
He said: "We're committed to no increase in income tax and no decrease in the headline rates of social welfare.
"With respect to income tax, the previous Government signed off on a situation where we would have to raise an extra €250m in income tax from taxpayers for each of the next three years.
"We now have to renegotiate that with the IMF/EU and we will do that because we regard an increase in income tax like that as being a restriction in incentive to work in the first place. I believe that we will be able to renegotiate that deal."
Earlier yesterday Transport Minister Leo Varadkar said the State may sell off its 25pc stake in Aer Lingus.
Fine Gael's two-day session was held to prepare the party for the Dail's return on September 14.
The party's 99 TDs, Senators and MEPs were given presentations on the economy from Enterprise Minister Richard Bruton, ESRI Research Professor John Fitzgerald and Paddy Power CEO, Patrick Kennedy.
There were also reports delivered on children's rights from Children's Minister Frances Fitzgerald and a discussion was held on how the party will fight the presidential election.