New Exchequer figures show the Government recorded a deficit of $958m (€823m) to the end of June.
This compares to a surplus of over $2.33bn (€2bn) for the same period last year.
However, the Departments of Finance say when adjusted for sale of AIB shares last June, the exchequer balance is down by just $376m (€323m).
Meanwhile, tax revenues are up 5.4% and gross expenditure on public services and infrastructure is also up 7.6% year-on-year.
Minister for Finance and Public Expenditure and Reform Paschal Donohoe said the figures “represent solid performance underpinned by an improving economy”.
He added: “This in turn translates into strong revenues which are funding the delivery of our public services and investment in key infrastructure. Today’s figures provide a basis for the achievement of Budget day tax forecasts by year-end.
“Tax revenues have performed robustly and at €24.9 billion represent a 5.4% year-on-year increase, which is slightly ahead of expectations. Reflecting our broadly-based recovery, most tax headings have recorded annual growth.”