The ACT's stronger than expected economic performance in the June quarter has prompted treasury to adjust its growth forecast for the territory.
ACT Treasury has published its pre-election budget update, providing parties and candidates with the latest information on the state of the territory's finances ahead the October 17 poll.
The figures are broadly similar to those produced in the economic update Chief Minister Andrew Barr handed down in August 27.
The forecast deficit for this financial year has been revised up from $909 million to $913 million, as a result of minor technical adjustments. The ACT's debt level is expected to be about $240 million higher than expected in 2020-21, due to a change in how government accommodation leases have been presented.
There is one further key difference between the two sets of numbers.
Treasury now expects the ACT's gross state product, which is a measure of a jurisdiction's economic output, to be up 2.75 per cent in 2019-20, up from the 1.5 per cent projected in the August 27 update.
The report, which was prepared by Under Treasurer David Nicol, said the change was the result of stronger than anticipated public consumption, private sector spending and investment in housing. That growth was partially offset by "weaker" household spending.
The ACT economy contracted by 2.2 per cent in the June quarter, a far smaller decline that the 6 per cent anticipated in Mr Barr's August update.
The territory was the least affected jurisdiction in the quarter, a period during which Australia's GDP fell 7 per cent and the nation's economic recession was confirmed.
Treasury's report highlighted two sets of new figures which represent positive signs for the ACT's economic recovery. The number and value of residential building approvals were up 32 per cent and 48 per cent respectively, while retail trade increased by 5.8 per cent.
While the ACT is on a path to recovery, treasury predicts the territory's gross state product will contract by 1.5 per cent this financial year, before a forecast 4 per cent spike in 2021-22.
Treasury noted in this week's report, as it did in the August 27 update, that there remained a significant degree of uncertainty surrounding the economic outlook due to the pandemic.
New COVID-19 outbreaks in Australia and overseas would "weigh on" household and business confidence, resulting in more economic pain than anticipated, according to the report.
"By contrast, if the virus can be effectively contained this would strengthen consumer and business confidence and also allow a more rapid path towards the easing of restrictions," it stated.