The budget deficit will fall to $331 billion this year, down from last year’s record $412 billion, as tax receipts from growth in income and corporate revenue rise, the Congressional Budget Office forecast yesterday.

The figure is slightly below the Bush administration estimate last month of $333 billion. The deficit will be $314 billion in the 2006 fiscal year that begins in October, and will reach a total of $2.1 trillion over the next 10 years, the budget agency estimated.

A narrowing deficit would be the first improvement in the annual shortfall since President Bush took office and would move the White House closer to its promise of halving the deficit by 2009.

“This report confirms the dramatic improvement in the 2005 deficit picture that the administration reported last month,” a spokesman for the Office of Management and Budget, Scott Milburn, said. “The president is committed to the combination of strong economic growth and spending restraint that will keep us on track to cut the deficit in half by 2009.”

Democrats said deficits may remain or worsen over the long term because of Mr. Bush’s plan to make permanent $1.85 trillion in tax cuts over 10 years that are set to expire by 2010.

“While this year’s deficit will be lower than last year’s record shortfall, the improvement is likely to be short-lived,” Senator Conrad of North Dakota, the senior Democrat on the budget committee, said in a statement. “Continuing to cut taxes and increase spending only accelerates our buildup of debt, resulting in us borrowing more and more from foreign countries.”

A principal at Stone & McCarthy Research in Skillman, N.J., Ward Mc-Carthy, said uncertainty over the cost and length of the war in Iraq will contribute to swelling deficits over time.

“We really have no control over spending,” he said.

Unexpectedly high tax revenue is responsible for the drop in the deficit projections, the chief economist at Standard & Poor’s in New York, David Wyss, said.

“First, we’re getting more corporate profits as a share of the economy, and corporate profits still get taxed at a somewhat higher rate than personal income,” he said. “Second, we’re pulling in a lot more capital gains income than they were expecting.”

The director of the Congressional Budget Office, Douglas Holtz-Eakin, said corporate tax revenue rose by more than 40% this fiscal year while 14% growth had been expected. CBO isn’t sure why that happened, he said. Companies may be more profitable than the standard measures show, or profits shifted away from companies that have tax losses to those that don’t, he said at a news conference.

“Most of this is transitory in nature,” and corporate revenue is likely to rise at lower levels in future years, Mr. Holtz-Eakin said.

The unemployment rate will average 5.2% in 2005 and 2006, and gross domestic product will grow by 3.7% in 2005 and 3.4% in 2006, the CBO said. Real gross domestic product will average 2.9% annually from 2007 to 2015, the report says.

“We see unemployment as essentially stable,” Mr. Holtz-Eakin said. The inflation rate is 2.3% this year and likely to decline a bit in later years, he said.