Exchequer figures for the first seven months of the year reveal a deficit €1.33 billion.
The figures, published by the Department of Finance today show that the total tax return was just over €25 billion.
Total spending was higher than budgeted for by the Government at the start of the year and amounted to €27 billion by the end of July.
Fine Gael's finance spokesman Richard Bruton said that the figures show that Government spending is starting to bite.
He said: "This situation is simply not sustainable. Clearly if this pattern continues the end of year deficit will be substantially worse than that forecast by the Government."
