Spain's central government budget deficit dropped to 4.39 percent of gross domestic product (GDP) in the nine months through September.
The figure was about 0.4 percentage point lower than the number in the eight months through August.
The news was greeted with optimism by Spain's Deputy Budget Minister Marta Fernandez Curras, who said the data underlined the fact that Spain was "heading in the right direction and the state deficit is under control."
"The final quarter of the year is when the reduction of the deficit is going to become much clearer," Curras said.
But she added that although the signs were positive, the government would not be relaxing its tax pressure on the population, who would continue to have to pay sales tax of 21 percent.
"The positive evolution cannot be translated into a relaxation of fiscal policy, The main thing is to continue with the reduction of the deficit for the rest of the year," she said.
The news came after Spanish Treasury Minister Cristobal Montoro on Tuesday said earnings from sales tax increased by 11.9 percent in the month of September.
Data published by the Spanish National Institute of Statistics showed earlier that the increase in sales tax had a detrimental effect on large and small shops with sales volumes in September falling by 12.6 percent compared to a year earlier.