Despite a worsening global economy that is affecting the province's performance, Nova Scotia's finance minister said Thursday that he sees nothing to prevent a promised balancing of the books by the spring of 2013.

Graham Steele released a fiscal update that projects a deficit of $365 million for this fiscal year.

The figure for 2011-12 is higher than the $319 million projected in September but $24.3 million less than forecast in last spring's budget.

Steele said the province is expecting $80.1 million less in revenues despite receiving more than anticipated from offshore royalties, personal income taxes and government fees.

"These increases were offset by small reductions in corporate income tax, HST, tobacco tax, motive fuel taxes and interest revenues," Steele said in a statement.

Finance officials said provincial source revenue was forecast to be almost $5 billion — a decline of 85.3 million from the spring budget.

Thursday's fiscal update included recently announced increases in government spending, such as $6.9 million for capital projects and $23.7 million for land in the deal to save the Bowater Mersey paper mill near Liverpool.

Steele said the worsening global economy had also resulted in a revised economic growth rate of 1.4 per cent, which is down from the 1.9 per cent forecast in the budget.

He said almost all provinces and the federal government have reduced growth forecasts, along with major banks and the Conference Board of Canada.

Government 'on track' to balanced budget

Despite the ominous indicators, Steele said the government is on track to balance the budget in the spring of 2013 because of ongoing reductions across government departments.

"If we stay on track … we would expect a deficit in the spring 2012 budget in the range of $215 million and then balanced the year after that," he said.

Both opposition parties seized the chance Thursday to ring the alarm on economic growth.

Liberal Leader Stephen McNeil said the numbers indicated growth would continue to decline, at least in the short term, without changes to high taxes and power rates.

"You see lower HST being collected because people are spending and consuming less and you see more people on income assistance because they need more help from the province," said McNeil.

Conservative Leader Jamie Baille said the only thing saving the province at this point are historically low interest rates that mean debt-servicing costs are down.

"Our economy at 1.4 per cent growth or virtually a standstill is growing distinctly less than the rest of Canada and you have to ask the question, why?" he said.