The Government borrowed a higher-than-expected £6.9 billion in December, marking the final update on the UK's public finances for 2016.
The Office for National Statistics (ONS) said public sector net borrowing, excluding state-owned banks, fell by £0.4 billion compared with the same month in 2015.
Economists were pencilling in a figure of £6.7 billion.
It came as Government borrowing, excluding banks, for the financial year to date - April to December - fell by £10.6 billion to £63.8 billion, compared with the same nine months in 2015.
Chancellor Philip Hammond has ditched his predecessor's target of balancing the books by 2020, vowing instead to put the public finances back in the black ''as early as possible'' in the next Parliament as part of a new draft Charter for Budget Responsibility outlined in the Autumn Statement.
A spokesman for the Treasury said the Government had made "significant progress in repairing the public finances" by driving down the deficit over the past six years from 10% of GDP to 4%.
"There is still further to go, and that is why the Chancellor will today present to Parliament an updated Charter for Budget Responsibility, setting out his new fiscal rules to bring the public finances back to balance as soon as possible in the next Parliament."
The Office for Budget Responsibility (OBR) - the Government's fiscal referee - said in November that it expects Mr Hammond to overshoot previous borrowing targets for this year, revising its outlook from £55.5 billion to £68.2 billion for 2016/17.
The OBR has also predicted debt to rise from 84.2% of gross domestic product (GDP) last year to 87.3% for 2016/17.
The ONS said public sector net debt excluding banks climbed by £91.5 billion to £1,698.1 billion in December, equivalent to 86.2% of GDP.
In a boost for the Chancellor, November borrowing was revised down to £11.3 billion from £12.6 billion as the UK's public finances finished 2016 in better shape than first thought.
The sharp drop in borrowing for the financial year to date came as central government tax receipts recorded a near 5% rise to £476.8 billion in the nine months to December 2016.
National Insurance contributions jumped 9.2% to £90.9 billion over the period, while corporation tax takings climbed 9.9% to £36.2 billion.
VAT receipts also recorded a rise, lifting 3.2% to £101.2 billion in contrast to same nine-month period in 2015. Income tax receipts were up 2.6% to £115.2 billion.
Howard Archer, chief UK and European economist at IHS Global Insight, said the December borrowing fall, coupled with the downward revision to November's figure, meant Mr Hammond has a "very real chance" of undershooting his revised target in the Autumn Statement.
"Largely healthy tax receipts in December pointed to ongoing resilient economic activity with robust increases in corporation tax and income tax receipts," he said.
"For now at least, the Chancellor looks solidly on course to - at the very least - hit the 2016/17 budget deficit target contained in November's Autumn Statement.
"Indeed, there currently looks to be a very real chance that the public finances could undershoot the revised target for 2016/17."