Ontario Finance Minister Dwight Duncan says the province's $21.3 billion deficit may be lower than originally thought. (Chris Young/Canadian Press)

Ontario's "stellar" first-quarter economic growth means last year's deficit may actually be smaller than the projected $21.3 billion, the provincial finance minister said Wednesday.

The economic update for the first quarter shows the economy was stronger than expected for the year ending March 31, Dwight Duncan said.

"That [$21.3 billion] was based on, again, a number of assumptions and with the information we're putting out today we know that things performed better than we assumed," he said.

The update also shows Ontario's real GDP increased 1.5 per cent during the quarter and consumer spending rose 0.6 per cent. The manufacturing and construction sector posted gains of 4.7 per cent and 3.5 per cent, respectively.

Ontario saw annualized growth of 6.2 per cent during the first quarter, which is the third quarter in a row of growth.

"What we're seeing now is stellar growth," Duncan said.

"We're looking forward to continued good performance in the coming quarters."

Ontario is still facing challenges, Duncan said, but the province's first-quarter growth was double that of the United States.

Duncan said he will be able to elaborate on the shrinking deficit projection next month when public accounts are published, but he expects it will hold true for this year as well.

"If you're starting off with a smaller deficit for the year ended, presumably if you follow the plan we've laid out, then the numbers will improve down the line — assuming no cataclysmic or unanticipated event," he said.

The government projected a record $24.7 billion deficit last fall, but a day before the budget in March it announced the deficit would be $21.3 billion.

In its budget this year, Ontario projected a return to balance in 2017-18, after an estimated $110 billion in deficit spending over eight years.