The ACT's budget bottom line has improved slightly, thanks to better than expected tax revenue and commonwealth grants.
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It comes as latest economic figures show a slight downturn in the ACT's retail spending in October, led by a drop in household goods consumption.
But this was mostly offset by an sharp increase in hospitality spending.
Chief Minister Andrew Barr said the current economic and social climate, reinforced by the latest economic data, aligned with the upside scenario set out in the August budget update.
"However the key unknown remains when international borders will be able to reopen and the effective rollout of vaccinations against the virus," he said.
He said the strength of the ACT's budget would largely depend on when the international travel and international students could return.
The territory is heading for a record $900 million deficit this financial year as the full cost of the COVID-19 pandemic hits the territory's bottom line.
But the latest quarterly figures show there has been a $41 million improvement on the bottom line this quarter.
This was mainly thanks to a $16.2 million increase in projected tax revenue and $26.2 million increase in commonwealth grants.
Mr Barr said it was difficult to say whether the budget position would continue to improve.
"There is still a great deal of uncertainty. Everything is predicated on the strength of our health response, you can't undertake an economic or budget recovery without controlling this virus," he said.
The increase in tax revenue has been mainly attributed to the government's lease variation discounts introduced in July.
According to the financial statements, the government has raked in almost $15 million more for the tax than budgeted for in the first quarter of the financial year.
Mr Barr said the concessions had most likely brought forward, rather than increased, overall revenue for the year.
"The government is currently considering the continuation or tapering of all COVID-19 stimulus measures and further announcements will be made shortly," he said.
The 2020-21 was due to be handed down in June but has been delayed until February next year due.
The latest economic indicators revealed the retail trade in the ACT fell by 0.1 per cent in October, driven but a decline in household goods consumption and other retailing.
However, these were almost fully offset by a 7 per cent increase in hospitality spending, and 8.4 per cent increase in clothing and personal accessory spending.
Australia-wide, retail trade rose 1.4 per cent in October, after a fall of 1.1 per cent in September.