The Government books have slid further into the red than expected, in the first three months of the financial year.
The operating deficit - excluding investment gains and losses - was $2.48 billion, $210 million greater than forecast.
A lower-than-expected tax take was responsible for the higher deficit.
The income earned from the goods and services tax was $154 million below forecast, while earnings from corporate and personal income taxes were also down.
Once investment gains and losses are included, the deficit for the three months to the end of September is $6.99 billion, in line with forecasts.
The Treasury expects investment losses to turn into gains during the year but notes that global equity markets are volatile.
However Radio New Zealand's political editor says if it is wrong and uncertainty in Europe continues to drive down markets, investment returns could be even worse.