​REGINA - The Saskatchewan government is projecting a slightly lower deficit than initially feared in its June budget and an economic bounce back to pre-pandemic levels in 2022.

The Ministry of Finance's first-quarter update predicts $2.1 billion in red ink, down from the $2.4 billion predicted earlier this summer.

The province expects to run deficits for the next three years before squeezing out a $125-million surplus in 2024-25.

The outlook for the year indicates revenues are expected to increase by nearly $400 million, mostly due to federal funding to help provinces restart their economies after COVID-19.

Expenses are also projected to be higher than at budget time because of spending on health, municipalities and the tourism industry.

Finance officials say the overall fiscal outlook has improved as many businesses continue to reopen and oil prices hover above US$40.

“The path to fiscal balance laid out in this report is based on the assumption that public health efforts around the world continue at the current pace and are successful in limiting the economic impact of future COVID-19 resurgences, and that the provincial economy returns to its pre-crisis level in 2022,” the report reads.