The ACT has retained its prized AAA credit rating, with low unemployment and strong population growth expected to continue powering the territory economy.
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But ratings agency Standard & Poors has warned the Barr government faces a challenge to deliver on its infrastructure agenda due to "capacity constraints".
On Thursday, S&P reaffirmed its short and long-term outlook for the ACT.
It said the ACT economy continued to "outperform its domestic peers", with gross state product growing at 4.25 per cent.
Continued strong population growth, high household income and low unemployment were among the key drivers.
The agency said the territory's heavy reliance on the public sector made it more vulnerable than other jurisdictions if the Federal Government reined in spending.
However, it expected any damage to the overall ACT economy to be minimal.
Similarly, it did not believe the Coalition's decentralisation agenda posed much of a threat, given the relatively small number of jobs at risk of relocation.
The rating agency predicted the territory's financial position would "weaken slightly" in the next two years as it started work on major infrastructure projects, including the SPIRE hospital project.
But it warned the delivery of those projects "could be a challenge given the capacity constraints in the engineering and construction industry".
Dan Jervis-Bardy
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
