Government remains on track to meet its goal to erase the country's huge budget deficit over the next five years, Chancellor George Osborne said on Wednesday.

We are on course to achieve that mandate, and have eliminated the structural current deficit by 2016-17, Osborne told parliament in his annual budget statement.

The government's Office for Budget Responsibility forecast predicted that net borrowing would fall from 126 billion pounds in 2011/2012 to 21 billion in 2016/2017, he said.

The OBR's new forecast is slightly more optimistic than in November, when the chancellor was forced to extend his austerity drive beyond the 2015 elections.

Overall Britain's public sector debt as share of gross domestic product (GDP) will peak at 76.3 percent in 2014/15 before falling, fulfilling the second part of the fiscal target.

The budget deficit, however, hit a record for the month in February as income tax receipts dived and spending climbed.

(Reporting by Sven Egenter. Editing by Jeremy Gaunt.)