The council said it had reduced its budget overspend for the last financial year by more than 40 per cent – but it was still £2.5 million over budget.
The overspend is down on the budgeted deficit of £4.3m.
The matter will be discussed by Shropshire Council's cabinet next Wednesday, July 6.
The authority said the situation reflects "many of the pressures hitting the council’s budget, including the effects of rising inflation, growing demand for children’s social care and the difficulty in recruiting staff to support this area, as well as reduced income for its commercial investments and services".
Gwilym Butler, Shropshire Council’s Cabinet member for finance and corporate resources, said: “It is of course disappointing that the council has finished the financial year over budget, but there are very clear and understandable reasons as to why this happened.
“It is compounded by the fact that it costs more to provide many of our services because Shropshire is a very large, sparsely-populated county, particularly at a time when things such as fuel costs are increasing so rapidly, and that we are not fairly funded to reflect this.
“We can, however, see that we are continuing to move in the right direction and have strong plans in place to continue to manage our financial position; although, like all businesses, we must keep this under close review to take account of emerging and unforeseen pressures such as the highest inflation rate for 40 years.
“We are now working to look at how we can further address these and will be presenting initial ideas for this soon.
“We are confident that, while we face a very challenging financial situation, we are continuing to move towards a much more sustainable position budget, with greater control of our future.”
The council says that it has "strong budget control plans" to "actively manage its budget position to give greater control of its finances and help reduce overspends further, as well as tackle its structural budget deficit gap".
A spokesman said that in children’ social care it is now training up apprentice social workers, the first group of which will qualify in January 2023,which will reduce the need for costly agency staff to cover vacancies.
The report which will be considered by the council’s cabinet shows that, in 2021/22, the authority received £7.6m in grants to cover the costs of the pandemic.
It says that most of the money has been used to cover most additional costs resulting from the pandemic.