Roger Melanson released a third quarter report on Friday that forecasts the deficit to be $255.4 million, down $135.7 million from the last projection of $391.1 million.
Melanson said that improvement is primarily due to annual, one-time payments in tax revenue, federal funding recoveries and higher net income from NB Power.
"Because of the unpredictability of these revenues ... we need to be in a position where we have well understood and planned sources of revenue," he said.
Expenses continue to be over budget in a number of departments, with total expenses expected to be $82.5 million higher that previously estimated.
The net debt is projected to increase by $377.1 million, which would bring the total net debt to more than $12 billion, the Finance Department said.
The fiscal update comes as the Liberal government holds consultations to find ways of saving up to $600 million per year.
Blaine Higgs, the finance critic for the Opposition Progressive Conservatives, said he believes the reason the Liberals are looking to save an amount of money much higher than the deficit is because of their aggressive spending plans.
"The spending initiative is going to be very difficult to control," Higgs said. "It will likely necessitate new taxes and it will likely necessitate some serious changes."
The government's spending plans include $600 million over six years for improvements on infrastructure including roads and bridges.
Melanson said some of the toughest decisions will be made in the government's second budget, a year from this spring.
No date has been set for this year's budget.
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