It came as the Central Bank slashed its growth forecast for this year, suggesting an economic turnaround will take longer than expected.

The slow pace of recovery will be felt by households around the country, which will see even further demands on their budgets.

The latest blows came as the VHI yesterday confirmed price hikes and Ruairi Quinn, the education minister, signalled third-level registration fees would eventually rise to €3,000.

The VHI announced it intended to hike its prices by an average of 9% from next month. Independent experts said this increase would mean the overall cost of some policies had risen by 65% in a single year.

Meanwhile, Mr Quinn signalled that the third-level registration fee would rise to €3,000 in the years ahead. In the budget, the fee was increased by €250 to €2,250, which takes effect for the 2012/2013 college year.

Speaking at a seminar in Limerick, Mr Quinn said it was likely to be further increased to €3,000. “We now have this €2,000 fee going up to €2,250 next [academic] year and probably increasing up to €3,000,” he said. “There has been a squeeze on the administrative fund and that squeeze will continue for the next two years.”

The double blow came as the Central Bank slashed its growth forecast for 2012 from 1.8% to 0.5%.

The bank said the “depth and duration” of the global slowdown would be central to Ireland’s prospects over the next year or so. “If the external slowdown persists longer than currently projected, this would make the fiscal targets for this year and 2013 more difficult to attain,” it said.

The bank’s revised growth projection matches those of the EU, ECB and IMF — the troika providing Ireland’s bailout loans.

However, the Government is sticking to its more optimistic growth forecast of 1.3% and has rejected suggestions it should hold an emergency budget in the first half of the year to deal with the effects of a weaker than anticipated recovery.

“The Government’s growth figures are medium figures and we’re prepared to stand by those,” said Taoiseach Enda Kenny.

“Growth figures, as you know, depend on a whole variety of conditions, many of which are difficult to determine in the time ahead.”

Mr Kenny said the Government is focused on jobs as “an absolute priority” and would publish its much-touted action plan for employment in the next fortnight.

The Department of Finance, meanwhile, reiterated there would not be an emergency budget and that the country remained on track to meet the deficit reduction targets laid down by the troika.

The department pointed out that the State’s budgetary position at the end of last year was better than anticipated, meaning the Government had some room to manoeuvre.

It also pointed to newly released exchequer figures yesterday, which were “broadly consistent with expectations”, as evidence that the economy was heading in the right direction.

The department will publish an updated economic assessment in April, a spokesman said.