A midweek update on federal finances is expected to show a substantial improvement in the bottom line.

The Mid-Year Economic and Fiscal Outlook is likely to reveal a fresh set of Treasury’s economic forecasts and a healthier budget outlook than was detailed in May.

The $13.9 billion deficit projected for 2023-24 financial year in the past budget is likely to be smaller, but Treasurer Jim Chalmers has played down the prospect of a second surplus.

There was a record $22 billion surplus in 2022-23 due to strong revenue growth from surging commodity prices and low unemployment and wage growth.

But some economists are tipping another year in the red due to higher-than-expected revenue. They include Rich Insight’s Chris Richardson, who is forecasting a $10 billion surplus for 2023-24.

The midyear update will not function as a “mini budget”, Chalmers said, and will not feature anything new to help those doing it tough amid the cost-of-living crisis.

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Chalmers told Sky News on Sunday that gross debt will be about 10 per cent lower than forecast for 2023-24, in which gross debt was projected to exceed $1 trillion.

Instead, he said, it would be about $909 billion.

News.com.au also reported that taxpayers will soon pay more on interest than the National Disability Insurance Scheme, highlighting that borrowing costs are the fastest-growing area of spending (up to $80 billion) in the coming decade.

“With higher rates, the interest on the trillion dollars of debt left to us by the Coalition is costing taxpayers more,” Chalmers said.

“The interest bill on the Coalition’s wasted decade is now the fastest-growing expense in the budget.”

A check-up on the labour market is also expected this week from the Australian Bureau of Statistics.

Thursday’s jobs report for November follows an uptick in the unemployment rate to 3.7 per cent in October from 3.6 per cent in September.

Although the labour market is showing signs of easing, it remains very strong compared with historical normals.

Reserve Bank governor Michele Bullock is also due to speak at the AusPayNet Summit in Sydney on Tuesday.

She might offer more insight into the decision to keep interest rates on hold at the December meeting, as well as her thoughts on the weaker-than-expected economic growth data for the September quarter.

Other highlights include NAB’s business survey and Westpac and Melbourne Institute’s consumer confidence survey, both scheduled for release on Tuesday.

-with AAP