Financial watchdog warns Government's plan to spend more and cut tax 'a risky strategy'

Tánaiste Leo Varadkar has said increased spending on public projects will be prioritised and there will also be a tax package for workers to ensure they are not impacted by inflation. Picture: Denis Minihane.

Government plans to boost the take-home pay of middle-income earners and to increase public spending risks overheating the economy, a financial watchdog has warned.

The Irish Fiscal Advisory Council (IFAC) has hit out at the Government for avoiding hard choices, saying that tax increases must be included in next month's budget.