And figures released in the latest quarterly central government management accounts for the first three months of the current financial year, show net expenditure is predicted to end £3.3m below budget.
Employee costs are down, £0.2m lower than budget.
But departments are facing financial pressures in line with expectations, especially those providing essential frontline services, with four projecting a current overspend position.
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Overall, income tax income is £10.2m ahead of budget for the year to date which Treasury says demonstrates the continued resilience of the local economy.
Customs income and other Treasury income is £1.4m and £1.8m behind budget respectively, however.
But with taxation income forecast to be £14.9m above budget by year-end, investment income from the general reserves won’t need to be drawn down to contribute towards overall government expenditure.
The management accounts note: ‘The current intention is that Treasury investment income will not be drawn from the reserves during the year due to the strong forecast performance of income tax receipts.
‘The investment income is not expected to be required to fund general revenue expenditure this year. Instead, investment income will be retained within the reserves to be added to investment balances allowing investment returns to be enhanced.’
This was budgeted at £8.3m for the full year.
The value of the Isle of Man’s total reserves is currently £1.96bn.
Statutory boards are showing a favourable variance of £1.8m against budget, mainly driven by the Financial Services Authority.
But some departments are reporting to be over-budget.
The Department of Health and Social Care has reported a £2.7m over-budget position for the year to date. This relates to the cost of the mandate to Manx Care.
To mitigate this a specialist financial recovery programme is being developed to complement the existing Cost Improvement Programme.
The Department of Environment, Food and Agiculture is forecasting a net adverse position of £172k.
It has continued to require agency staff within the planning division and has also been drawing on internal funds to meet costs associated with the Meat Plant.
Meanwhile, the Department of Home Affairs has incurred extra costs relating to forensic services that were not predicted and a series of recent police cases. It is showing a potential adverse variance of £0.9m for the full year.
A cost improvement plan has been implemented and a number of ongoing projects are aimed at achieving savings or mitigating spending to enable the department to bring its full year result within budget.
The Department of Education, Sport and Culture is facing increased employee costs - forecast to exceed budget by £3.2m - due to agreed pay awards and additional staffing requirements due to more children requiring education within Specialist Provision Centres. However, they are expecting to end the financial year on budget.
Treasury says further monitoring will continue with regular scrutiny panels taking place with departments to identify and mitigate financial challenges and risks early, and provide advice and support.