The Abbott government's budget deficit could blow out by billions of dollars more than already expected, according to an analysis by the Parliamentary Budget Office.

The PBO has released an analysis of the "sensitivity" of three main drivers of the Australian economy that are key to the government's medium-term budget projections.

Budget warning: Tony Abbott, Christopher Pyne and Joe Hockey arrive at question time on Wednesday. Credit:Alex Ellinghausen

Those key drivers are labour productivity growth, the labour force participation rate, and the terms of trade.

It has found that labour productivity is more likely to decline than improve over coming years and that this will hurt revenues.