The Government will seek to “finish the job” and get the budget deficit below 5% of GDP next year, sending “a clear signal” that the country is on the road to recovery.

The Government should ease up on the budgetary adjustment by €500m this year and rule out any further tax increases, according to Ibec in its pre-budget submission.

The 0.6% contraction in GDP over the first quarter of 2013, following on from the revised 0.2% shrinkage in the final quarter of last year, puts Ireland officially back in recession.