Graham Steele said the projected deficit is down to $203 million. (CBC)

Nova Scotia's debt now stands at $13.1 billion, which is $88 million higher than previously thought.

The mistake was identified in the 2010-11 budget update, which was released Wednesday. It was blamed on an accounting error.

Finance Minister Graham Steele said the good news is that the projected deficit for this year is now $203 million, down from $222 million.

"We continue to meet the targets in our four-year back to balance plan with the year-end deficit now forecast to be $203.2 million," he said.

"Our progress is good, but there are still risks, volatilities and uncertainties, on which we will be keeping a close watch. The economic recovery is real but fragile."

Steele said one of the bigger uncertainties is how much the province will continue to receive in offshore royalties.

Export sales of natural gas are down 53 per cent and revenues off by $12 million as a result of lower prices and declining production at the Sable Project.

The budget was helped by lower than expected interest costs on the provincial debt.

Raising the HST from 13 per cent to 15 per cent is also expected to add another $7 million to the provincial coffers.