The government's books are in better shape than expected, with lower expenses and a higher GST take reducing the forecast deficit by nearly 70% to $630 million.
According to Treasury's latest figures, the country's deficit was $1.4 billion better than forecast for the seven months to January 31.
Helping narrow the deficit was a sharp reduction in Crown expenses, largely due to the timing of Treaty of Waitangi settlements being later than forecast, which reduced that expense by $678 million compared with forecasts.
There was also a $128 million reduction in provisioning for the deposit guarantee scheme.
Better figures were further helped by a $258 million rise in forecast GST revenue, with Treasury noting that private consumption in the December quarter, such as retail sales volumes, were above expectations.
However, GST gains were partly offset by a $153 million drop in corporate tax revenue because of weaker-than-expected current tax year profitability.
The government's operating balance before gains and losses was $883 million better than forecast at $3.36 billion.
Gross debt was $2.9 billion lower than forecast at $48.7 billion.
Debt now accounts for 26.4% of the nation's GDP compared with the 28.0% forecast.
