Treasurer Scott Morrison has urged Australia to confront the "air of unreality" about the size of its budgetary problems which could see the country lose its prized AAA credit rating as early as Monday following the release of the mid-year budget update.

A downgrade from the AAA rating, now regarded as all but inevitable by government officials, would be the first since the 1986 currency plunge and "banana republic" crisis. It took until 2011 for Australia to win back its AAA rating from the three leading ratings agencies.

A survey of 15 budget analysts by Bloomberg predicted an announced budget deficit of $37 billion for 2016-17 in Monday's mid-year economic and fiscal outlook (MYEFO), almost exactly the same as the $37.1 billion announced at the budget in May.

The Commonwealth Bank is expecting a deficit forecast as low as $33 billion. Westpac is expecting a deficit of $40 billion and says the budget forecast of a surplus by 2020-21 is "hanging in the balance".