This year's anticipated economic growth of 5 or 6 per cent is unlikely to continue into the first quarter of next year, the Taoiseach said.
"When the Central Bank and the ESRI brought out their figures in September, and I was asked publicly about them, I said I did not think they were right and that the carry-over in the first quarter would roll in," Mr Ahern added.
"The 2.6 per cent they mentioned the other day is probably more an indicator. That is the position and the reason incomes are down across the tax heads.
"We now face a situation in which we have to try to maintain employment as best we can."
The Taoiseach also indicated that there will be a reduction in the number of work permits issued to immigrants because of ongoing job losses, adding that the Tβnaiste, Ms Harney, had already said that the matter would have to be looked at.
"We have to try as best we can to look after our own population and workforce. There is still quite an amount of buoyancy in the labour market, but, obviously, if people lose their jobs in some areas, we have to try to balance that with those recruiting in other areas, and that the Government will do."
Fine Gael leader, Mr Michael Noonan, said the jobs crisis continued with news of proposals for 250 job losses in The Irish Times and 100 in Waterford Wedgewood.
"The Minister for Finance, Deputy McCreevy, stated yesterday that he has no idea where the money has gone and cannot explain the reduction in receipts from income tax, VAT and excise duties, even though, as he says, people seem to be drinking and smoking as much as ever.
"Does the Taoiseach think this is the man who should introduce a budget in a month's timed when he has no idea what is happening to the flow of revenue and has to base a budget on the flow of revenue expected in 2002?" he added.
Mr Ahern said the economic downturn across the world was creating enormous shocks.
"I spoke to a number of European colleagues over the weekend and there have been significant job losses.
"Almost 500,000 jobs have been lost in the US in six weeks and there has also been a downturn in Ireland."
Pressed further by the opposition to explain the downturn in the economy, Mr Ahern said in the period between September and Christmas last year, the Irish economy was growing at just under 12 per cent. It had grown by 11.8 per cent for the year as a whole.
He said that rate had been dramatically reduced, as it had all over the world.
"The world economy is either in negative or neutral," Mr Ahern concluded.
