Brian Lenihan, Ireland's finance minister, will deliver the harshest budget in decades later today, brutally signalling the end of the boom years of the “Celtic Tiger” economy.

Mr Lenihan is expected to announce a combination of tax rises and around €2 billion in spending cuts in which no sector of the Government will emerge unscathed.

The shuddering halt, in Mr Lenihan’s own phrase, of a 15-year property boom coupled with global financial turmoil made Ireland the first eurozone country this year to enter recession, causing a steep fall in tax receipts.

The slide in the budget deficit was so sudden and alarming that the Government brought forward the publication of its 2009 budget by two months to reassure the public and investors.

Government data released over the weekend showed the exchequer deficit for this year was €11.52 billion, rising to €14.79 billion in 2009, on a pre-budget basis – a deficit of seven per cent of GDP for next year.

That is more than double the 3-percent cap set by the European Union's Stability and Growth pact.

In advance of presenting his budget to the Dail, Mr Lenihan said:"We have to ensure that our income tax system, our tax system is progressive and that those who can afford to pay, pay the most."

Some much-needed infrastructure projects within the €184 billion National Development Plan would also have to be delayed.

Rises in income tax, excise duties and a new airport departure tax have all been mooted.

A special "income levy" of 1 to 2 percent is expected to be the star of the budget "horror show", the Irish Independent said in an editorial.

"The pills are sure to taste a little bitter after a decade of budget giveaway sweeteners," it said.

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