Economists have warned UK public sector finances aren't improving quickly enough for the government to meet its deficit-reduction target laid out in the Autumn Statement.
Public borrowing, excluding state-controlled banks, fell to £7.47bn in December from £11.7bn a year earlier, figures from Office for National Statistics (ONS) have shown. This also beat economists' expectations for a decline to £10.5bn.
For the nine months to December, borrowing totalled £74.2bn, down 12.9 per cent from the same period in 2014.
But Chancellor George Osborne will struggle to meet his target of reducing borrowing in the 2015/2016 tax year to £73.5bn.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The public finances still are not improving quickly enough to suggest the Autumn Statement forecasts are likely to be met, despite the better figures for December."
"With the economic recovery lacking vigour, we think the Chancellor soon will face a dilemma of either announcing additional austerity measures or abandoning his budget surplus goal."
It comes as a string of disappointing economic data is stoking concern over the strength of the UK economy. The ONS said today that retail sales actually fell by one per cent in the month to December.
"Today's figures show that borrowing is down compared to last year, as a number of one-off factors that have affected the data in recent months have unwound," a treasury spokesperson said.
"But there is more to do. At a time when we face a dangerous cocktail of risks from the global economy we must continue to work through our plan to deliver a surplus and provide economic security for working people."