The Cabinet will discuss the “overarching” approach to the next Budget this morning.
The Finance and Public Expenditure Ministers are bringing a joint memo setting out the overall targets, with fewer cuts and tax increases expected than in recent years.
Minister Howlin said it is still far too soon to pinpoint targets for individual departments, but he said the economic outlook is improving.
"We certainly will not have to make the adjustments of the €2bn scale that was forecast in last year's Budget … to get to the deficit target of 3% or below," he said.
"So we'll have a less demanding Budget than that."
He said the Government will meet its deficit target, even with a less severe Budget.
"In April when we were projecting … we thought it would be necessary to increase tax and cut expenditure by €2bn [but] we'll get under 3% now by making less cutbacks and less tax increases," the Minister for Finance, Michael Noonan said.
"But it's too early in the year yet to say by how much."