The Vatican has become a victim of the global financial crisis as donors have chipped in significantly less over the last yeart.
The Holy See recorded a 12% drop in donations from ordinary worshippers and a 5% drop in offerings from religious orders, according to its 2012 budget.
Worshippers' contributions, known as Peter's Pence, totalled $65.9m (£43.7m) - down almost $4m on 2011.
The Vatican nevertheless expressed its "deep gratitude for the support given, often anonymously, to the Holy Father's universal ministry in spite of moments of economic crisis".
The Holy See still managed to deliver a $2.85m budget surplus "due mainly to good performance in financial management," the Vatican said in its annual financial statement.
Most expenses were for its 2,823 staff, the steep costs of running the Holy See's global radio programming and an unpopular housing tax, known as IMU, introduced by Italy's former prime minister Mario Monti.
The Vatican City state, which runs the Vatican Museums, post office and supermarket and has a separate budget, also delivered a profit.
With a workforce of 1,936, the governorate posted a €23.08m (£19.7m) profit - up from €21.8m in 2011.
Last year the Holy See booked a €14.9m shortfall.
The Vatican's finances benefited from its embattled bank, the Institute for Religious Works, or IOR, which handed Pope Francis €50m in support of his apostolic and charitable ministry.
The generous offer has not prevented the Pope setting up a commission of inquiry into the bank to shine a light over the many scandals it has been involved in.
Within days of the commission being set up, senior Vatican accountant Monsignor Nunzio Scarano was arrested on charges of plotting to smuggle €20m from Italy from Switzerland
Since his election earlier this year, Pope Francis has often hit out at the "cult of money", and blamed it for causing growing global inequality.