The Irish economy may post "spectacular" growth of more than 7% this year.

However, there is little danger of it overheating or of the government over-spending, Public Expenditure Minister Brendan Howlin told Reuters.

It is five years since Ireland was forced into the troika bailout programme.

Since then, a weak euro and years of pent-up demand have helped make it the fastest growing economy in the European Union with growth of 5.2% last year.

Now bumper corporate tax returns and a decline in the unemployment rate to below 9% have convinced the Government that the economy may return to 7% growth for the first time since the Celtic Tiger era.

"There is every likelihood it may well be higher than 6.2% at the end of this year," Minister Howlin said, adding the final figure could be 7% or above.

"It's not unusual for an economy that fell as far as ours did to have an initial bounce-back that is little short of spectacular," he said.

The Government was criticised by some economists in October for increasing planned spending this year by €1.5 billion after corporation tax receipts came in far higher than forecast.

But Mr Howlin dismissed as "overly cautious" the critics' warnings that the country should limit spending increases and instead pay back more debt in case the growth rate drops off.

Even after the extra spending, the Government is forecasting a budget deficit next year of 1.7%, almost half the 2015 target under Ireland's bailout.

"People talk about overheating as if we had an economy working at full capacity. We certainly haven't," Mr Howlin said.

The country's small flexible economy can "shift our footing very quickly" if circumstances change, he said.