Michael Noonan expected to announce cuts in personal taxation

The country exited its international bailout programme in 2013 and is now Europe's fastest growing economy.

Finance Minister Michael Noonan is expected to announce a cut in personal taxation.

However, some analysts have warned that Mr Noonan should do more to tackle high levels of government debt.

Threshold

The governing coalition has indicated that there will be a modest giveaway of about 1.5bn euro (£1.1bn).

About half of that will reportedly be used to cut the unpopular Universal Social Charge (USC) which is sometimes called "the bailout tax".

The threshold at which people pay USC is expected to rise to 13,000 euros (£9,646).

There is also expected to be a new tax credit for self-employed people and an increased threshold for inheritance tax.

There are reports that the old age pension will go up by 3 euros (£2.22) a week. There will also be an increase in the fuel allowance.

It is understood that the government plans to create 2,200 new teaching posts and at least 500 additional jobs in policing.

Mr Noonan is to address the Dáil at 14:15 BST. Public Expenditure Minister Brendan Howlin will set out spending plans when he speaks at 15:00 BST.

The Republic of Ireland's economy, as measured by Gross Domestic Product (GDP), is growing at an annual rate of more than 6%.

The Gross National Product (GNP) measurement, which strips out some of the distorting activities of multi-national firms, is showing growth of about 5%.

Unemployment has come down from over 14% in 2012 to 9.4% in September, bringing welfare spending down significantly.

Government debt has fallen to about 100% of GDP compared to a peak of 120% in 2012.

The country's independent Fiscal Advisory Council has said the government's proposed package is "at the upper end of the range of prudent policies".

It warns that the country's debt to GDP ratio "remains extremely high leaving the economy vulnerable to adverse growth and interest rate shocks".

Irish Prime Minister Enda Kenny has said that he intends to hold a general election in Spring 2016.

His centre-right Fine Gael party is the senior partner in coalition with the centre-left Labour Party.

Both parties are struggling in the polls despite the improving economy.