Patrick Honohan, the governor of the Central Bank of Ireland, has acknowledged that plans to reduce the country's deficit to 3% by 2014 are likely to fall short.

Honohan conceded on Monday that, in light of higher borrowing costs and less-favourable-than-forecast economic conditions, Ireland could struggle to meet the 3% target in four years' time.

"As the IMF and others have noted, the real economy, the price level and also interest rates on government borrowing, have evolved in a less