No new austerity measures are needed in the next budget in order to hit the deficit target, according to research by Goodbody Stockbrokers.

In its latest quarterly economic commentary, Goodbody says the economy is strengthening quicker than expected, leaving the government space to introduce measures to boost growth.

It also says tax revenue is higher than anticipated, at around a billion so far this year. Goodbody also suggests that water charges will bring in a further €500 million for the Government when they are introduced.

The group predicts the deficit at the end of 2014 will be around 3.7%.

Chief economist with Goodbody, Dermot O'Leary, told Newstalk Breakfast the Government should have no issue hitting next year's deficit target of 3%: