Financial gains made on portfolio investments will help provide some relief to the total operating balance.
Treasury has already indicated the Government's half-year economic and fiscal update will show a weaker economic position.
ASB economist Jane Turner said the Government now had rating agencies breathing down its neck, a repeat of the situation in early 2009.
Rating agency Standard & Poor's has downgraded the outlook on New Zealand sovereign foreign currency credit rating from stable to negative.
"The move was surprising, given domestic economic developments, particularly given how much the economic outlook and fiscal deficit projects had improved relative to May 2009, when S&P reinstated New Zealand's stable outlook," Ms Turner said.
However, the ratings outlook might largely reflect events offshore, particularly in Europe, where the Irish Government recently had to accept emergency funds from the European Union and International Monetary Fund to support its trouble banking system, she said.
New Zealand's banking system relied heavily on offshore funding, leaving this country's financial stability vulnerable to disruption from global credit markets.
As a result, the pressure remained on the New Zealand Government to deliver a Budget next year which showed a credible path to reduced fiscal deficits.
"This will remain challenging in an environment of gradual revenue growth, even with restraint on spending growth," Ms Turner said.
Tomorrow, the Government was likely to lay out its key priorities for next year's Budget.
Lately, Finance Minister Bill English has talked constantly of a theme of rebalancing the economy away from being consumption-led to one which is more productive.
Ms Turner said addressing issues around New Zealand's savings and investment performance was likely to be part of the discussion.
In November, the Savings Working Group issued a statement noting that shifting the structure of the New Zealand economy towards exports and saving, and lifting productivity, especially in the government sector, were critical.
The net cost of the $1.6 billion bail-out of South Canterbury Finance should be covered by existing provisions, she said.
In the release of the Government's financial accounts to September 30, Treasury noted that the combined net cost to the Crown for the defaults of Mutual Finance, Allied Nationwide Finance and South Canterbury Finance was $745 million.
That compared to a provision for losses under the retail guarantee scheme of $881 million as at March 31.
"This almost entirely wipes out the existing provision which leaves the Crown's position vulnerable to failure of another finance company under the extended government guarantee programme.
"Indeed, another finance company has just gone into receivership. While the net loss from this company is likely to be negligible, the Crown has made no explicit provision for failures under the extended guarantee scheme."
Also, while the net cost of all four failed finance companies was expected to be relatively small, there was a large temporary impact on cash flows as cash had already been paid out but the realisation of assets in receivership would take time, Ms Turner said.
ASB estimated the weaker economic performance would increase the fiscal deficit - operating balance before gains and losses (obegal) - by about $1.5 billion to $2 billion a year.
The June 2011 deficit would be widened further by the $1.5 billion already provisioned for the Earthquake Commission.
ASB had not made any specific allowances for further costs associated with the Canterbury earthquake. Ms Turner said the costs were difficult to quantify but would contribute to further widening of the deficit.
As a result of the wider deficit, a direct flow through to funding requirements was likely. An extra $2 billion of bonds were expected to be issued each year, she said.
