The City of Winnipeg may need to find millions of dollars in next year's budget to cover overspending after its latest financial report shows the forecast deficit for this year has grown.

The city estimates its deficit for this year will be $23.4 million — down from a projected $40-million deficit in June, but an increase of more than $4.2 million from the $19.2-million deficit forecast in the last financial update, delivered in September.

The city has repeatedly drawn from its fiscal stabilization reserve — sometimes referred to as its "rainy day fund" — to balance the budget over the last few years, meaning there is nothing there to help this time.