With the economy in its third straight year of recession, generating revenue growth to further shrink the fiscal shortfall is proving difficult. Gross domestic product (GDP) is projected to shrink 3 percent this year after a 4.5 percent slump in 2010.

The data refers to the state budget deficit, which excludes local authorities and social security spending and does not coincide with the general government shortfall -- the benchmark for the EU's assessment of Greece's economic policy programme.

The data showed the January-February central government budget gap widened 9.0 percent year-on-year to 1.028 billion euros as net ordinary budget revenue fell 9.2 percent to 7.943 billion. Ordinary budget spending rose 3.3 percent.

The fiscal gap was higher than hoped, with revenues missing an indicative target of 8.808 billion euros in the two-month period by 9.8 percent.

The ministry attributed the weakness in revenues to lower proceeds from a one-off tax on profitable companies, down by 99 million euros from a year earlier, and lower income tax receipts.

It said the increase in expenses was due to a 351 million euro outlay to state hospitals to pay past due obligations. Interest payments were down 1.3 percent to 859 million euros.

Struggling to dig itself out of its debt crisis and return to bond markets, the overborrowed euro zone state is aiming to slash its budget deficit to 7.4 percent of GDP this year from 9.4 percent in 2010.