The operating balance excluding gains and losses (OBEGAL), which strips out unrealised investment gains or losses, for the five months to Nov 30 was a deficit of NZ$1.54 billion ($1.15 billion), 7.3 percent less than the Treasury's forecasts in the half-year economic and fiscal update in December.
The department said core tax revenue income was lower than forecast but offset by income from commercial activities and state enterprises, while expenses were also lower.
Finance Minister Bill English said in December he was confident the government would post a surplus despite the tax take being hurt by a slump in dairy prices and low inflation.