The cost of the Ukrainian refugee crisis could hit almost €3billion by the end of next year, according to internal Government projections.

Preliminary estimates for an initial cohort of 10,000 refugees is estimated to be around €500million annually.

This covers costs associated with accommodation, social protection supports, health and education.

So far, 13,500 Ukrainian refugees have arrived in Ireland.

However, Cabinet sources said that estimates show "costs are expected to ramp up significantly" when moving past 10,000.

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Internal projects by the Department of Public Expenditure and Reform show costs could rise to €1.7billion this year and €2.8billion next year. Separately, local authorities are currently drawing up lists of potential accommodation for refugees.

Emergency powers will be used to bypass the requirement for planning permission for the conversions.

The wider impact of the war in Ukraine on the Irish economy will not become clear until next week when the exchequer returns for the end of March are published.

This will give an indication of the sectors that have been impacted through reduced tax takes.

Public Expenditure Minister Michael McGrath updated the Cabinet committee on economic recovery and investment last night. He told his colleagues there had been a "significant drawdown" so far of the €4billion contingency fund provided for in Budget 2022.

In total, €1.5billion of the fund is already committed to cover the extension of Covid Supports in December and January, the €1,000 Health Staff Covid recognition payment, the €200 electricity credit and other cost of living measures. This means there is €2.5billion available to tackle any further Covid costs and labour market impacts as the Employee Wage Subsidy Scheme and other supports are unwound.

The Government is already struggling to cope with housing the existing influx of refugees.

On Friday, Integration Minister Roderic O'Gorman, who is spearheading the Government's response, said contingency housing options for Ukrainian refugees in places such as City West, Dublin, "may soon be used" as the Government scrambles.

This would entail placing refugees in temporary heated tented accommodation while more permanent housing is found.