The Minister for Finance is already under pressure to achieve his budget targets with only one month of the year gone. The Exchequer returns for January, published yesterday, show that tax revenues are down 5.7 per cent and spending is ahead 22.1 per cent compared with January last year.

The full-year targets set by Mr McCreevy on Budget day were for a 9 per cent increase in tax revenue and an 11 per cent increase in net current expenditure.

"We are on the wrong side of both numbers and the scope for restraint is limited by the coming election," said Mr Austin Hughes, economist with IIB Bank, who tempered his comments by saying it is dangerous to place too much store on one month's figures.

The Department's tax projections assume an economic upturn starting in the second half of the year, which will feed into tax revenues. There will also be changes in the way corporation tax is collected which should have a positive impact later in the year. Despite this, "quite a degree of acceleration will be required" if the minister is to make his numbers, according to Mr Hughes.

IBEC said the figures showed the Exchequer finances had started the year under pressure. Mr David Croughan, the chief economist with the employer lobby group, highlighted the sluggish growth in both excise and VAT revenues. Excise duties were up on 0.3 per cent - despite Budget day increases in tobacco products and oil - while VAT receipts were up only 1.4 per cent. The low VAT figure "suggests slow enough end-of-year consumer spending activity", said Mr Croughan.

The data appear to contradict anecdotal evidence of strong consumer spending over Christmas due to several factors, including so called "mattress money". It was widely reported at the time that a significant amount of cash that had not been declared to the Revenue Commissioners was entering circulation ahead of the euro. The picture will become clearer when the December retail sales figures are published.

Total tax revenues were €2.54 billion compared to €2.69 billion in January 2000. Income tax was €794,930 as against €833,945. Revenue from all sources of €2.7 billion outstripped expenditure by €383,000, meaning that the Exchequer remains in surplus. However, the surplus this time last year was €1.2 billion.