RUAIRI Quinn and his Cabinet colleagues will be hoping their winning economic run can continue for just one more year. At the moment, all their numbers are coming up. Today, the latest official forecasts predict higher growth, lower inflation and more jobs than had been foreseen at Budget time.

Even Mr Quinn's normally cautious officials concede the Government will have to borrow less this year than they had expected. With such trends in evidence, it is little surprise that the scramble has already started over the division of the Budgetary spoils for next year.

Over the past couple of years, forecasters have consistently underestimated the pace of economic growth. They have mainly been caught out by the rapid pace of export growth, fuelled largely by the multinational sector. For the moment, this growth appears to be continuing, although recent industrial production figures may be the first indicator of some slowdown in the extraordinary expansion of sectors such as electronics.

The signals are still positive enough to have led the Department of Finance to increase its growth forecasts and it now expects a healthy 6 per cent rise in Gross National Product and a 40,000 increase in employment.

THERE is no reason to quibble with these fore casts. They are in line with the average among private sector economists and are supported by what data is available on recent economic performance. The problem, of course, is there is so little hard up to date information available. This makes forecasting short term Irish economic trends about as scientific as feeling a bit of seaweed. So far there is no sign of any rain on the Government's economic parade, but can it continue?

The traditional electoral strategy would be for the Government to try to engineer a feel good factor through a generous Budget next January to pave the way for an election. This presupposes, of course, that such a package can be agreed. Already markers are being laid down, including yesterday's statement by the Fine Gael Party chairman, Mr Phil Hogan, calling for a strategy of reducing income tax rates to 45 and 25 per cent, from 48 per cent and 27 per cent now.

It is certainly an eye catching proposal, though it remains to be seen if it will receive the full backing of senior figures in the party. Whether it is the best way to go about tax reform is another question. However, given the electoral appeal and visibility of reducing income tax rates, some reduction in the 27 per cent rate may well be on the cards, with support also from the Labour party for such a strategy.

IT is early days yet in the 1997 Budgetary process, of course. Later this week, the Government Departments are due to lodge their spending requests for next year with Mr Quinn. They have been instructed to do so on a "no policy change basis". It remains to be seen whether this will be taken seriously or whether the usual annual nonsense of the Minister "cutting" hundreds of millions from grossly inflated departmental demands will be repeated.

Already, the indications are that the battle over 1997 spending will be hard fought. The high level of unemployment, the carry over cost of social welfare concessions and the cost of the crime package mean that holding spending to the target level of a 2 per cent real increase next year will not be easy.

If it had stuck to its own spending targets over the past couple of years, it would have been able to give substantially higher tax concessions.

It faces the same predicament next year. Should it spend more on social welfare and crime, or put more into cutting taxes? The political problem is that the electorate wants both better services and lower taxes.

There are two other considerations. One is the desire by senior Ministers to negotiate a new national programme to replace the PCW no doubt the trade unions will note Mr Hogan's tax suggestions. The other is the Government commitment to qualify for economic and monetary union, which means borrowing and inflation must be held in check. Even when times are good, producing an election winning Budget will be no easy task.