CHARLOTTETOWN -- Prince Edward Island's Liberal government is forecasting a $17.9 million deficit for the 2016-17 fiscal year, nearly double the $9.6 million deficit forecast in the budget.

The government blames the increase on a $30 million reduction in harmonized sales tax payments from Ottawa and an increase in spending by several departments.

It says the reductions were partially offset by higher tax revenues generated by the Island's economy.

Finance Minister Allen Roach said that despite the figures reflected in the third-quarter update, the government is confident it remains on track for a balanced budget in the coming year.

The increased expenditures include an extra $16.2 million for in and out-of-province medical services and drug costs.

An extra $6.9 million was also spent on infrastructure projects while an over expenditure of $6.2 million was recorded for disability support and social assistance payments.