The government's five-year plan for restoring Ireland's budgetary position appears to be excessively optimistic, with growth forecasts far in excess of what other sources are predicting, a leading economist has pointed out.

Philip Lane of Trinity College Dublin said in a paper, A New Fiscal Strategy for Ireland, it would be better for the government to adopt a "more sombre path for output''. The government's plan envisages growth of 2.7% in 2011, 4.2% in 2012 and 4% in 2013.

"These projected growth rates are far in excess of the potential output growth rates estimated by the European Commission,'' said Lane.

His comments come as the IMF calls into question the medium-term projections produced by the government to date.

"It would be more conservative to adopt a more sombre path for output, in line with the potential output growth rates. In turn it is easier to correct excessively pessimistic budgets than to row back from excessively optimistic ones,'' he adds.

Lane said it is vital the government establish a credible medium-term framework for a range of reasons. He said companies and policy-makers need to make plans based on this framework and that the bond market also look towards a "medium term horizon''.

Lane also said the balance between spending and taxation has not been fully specified for the period between 2012 and 2013.

Lane said an increase in taxes would have a negative impact on output. Lane also said the government should consider using independent forecasts for GDP growth and not just those produced inside the Department of Finance.