Improved returns on investment funds have helped to bolster the Government's books, but the recession is keeping the accounts firmly in the red.
The Crown accounts show an operating deficit of $7.2 billion for the 11 months to May.
That is $1.2 billion better than forecast, largely due to a gain of $1.2 billion in the NZ Super Fund and a gain in ACC.
Tax revenue was on forecast, but the operating deficit excluding gains and losses, was slightly better than forecast, totalling $1.2 billion.
Net debt is also close to forecast. It is at $15.7 billion, 8.7% of Gross Domestic Product.
In the 2009/10 Budget, the Treasury forecast an overall operating deficit of $9.3 billion for the year to 30 June, with a net cash shortfall of $8.46 billion.
It also forecast large budget deficits for much of the next 10 years and increased borrowing to cover the shortfalls.