Ireland has dodged the worst of the global slowdown and is set to return to solid growth, its finance chief said.
McCreevy is on his seventh budget
Presenting a cautious budget, Finance Minister Charlie McCreevy predicted growth of 3.3% in 2004.
The figure is a far cry from the double digit expansion seen in the late 1990s boom, but is a return to form after this year's forecasts of about 2%.
But the slide of the dollar against the euro was a risk given Ireland's dependence on exports, he warned.
Mr McCreevy also extended a reprieve to the tax breaks which have brought a number of big-budget films to Ireland in recent years.
The rules were meant to end this year, but a coalition of Irish actors had pleaded for them to continue.
Mr McCreevy said they will continue until 2008, and upped the ceiling-per-film to 15m euros from 2005 onwards.
A key policy in the budget, Mr McCreevy said, was to try to decentralise Ireland's government, with eight of 15 departments set to move out of Dublin.
That means relocation for about 10,300 employees, in order to ease the pressure on an increasingly congested capital city and spread government largesse more widely in the 3.8 million-strong nation.
"No longer will policy be entirely made in Dublin on the basis of a Dublin mindset," Mr McCreevy told the Dail, or parliament.
Other key features of the budget include:
Increased "sin taxes", with an extra 25 cent duty on tobacco products and 5 cents on a litre of petrol, to bring in an extra 243m euros a year
A rise in the pension age to 65
A 30m euro one-off payment to ease local government finances
A total of 5.6bn euros to be spent on capital projects such as roadbuilding, taking the total since 1997 to almost 34bn euros.
Mr McCreevey's budget - his seventh - is predicated on a government deficit of 1.1% of GDP, or 1.6bn euros.
That remains well below the level in much of the European Union - particularly in France and Germany, where it is above the 3% ceiling set by Europe's stability and growth pact.
The low deficit is partly the result of higher-than-expected tax revenue, despite Ireland's moves to cut tax rates sharply in recent years.
Basic income tax for someone earning 25,000 euros a year is now less than 16%, against about 34% in 1997.
Even so, the tax take rose to 31.6bn euros for the first 11 months of the year, up from 20bn euros last year.
That left a surplus of some 800m euros, a little less than in the same period of 2002.