The revised 2014 budget agreed by the cabinet and three opposition parties last week will worsen the government’s financial position to the tune of €700m, according to the macro-economic planning agency CPB.

The knock-on effect will be some €600m in subsequent years, the government’s think-tank said in its preliminary calculations. The finalised figures will be published on Thursday and will also include the likely impact on jobs and spending power.

Parliament is debating the agreement, which gives the government a narrow majority of one in the upper house of parliament, later on Wednesday.