In the lead up to the budget handed down on August 2 Mr Barr - like all his federal, state and territory counterparts - was faced with a particularly complex and challenging set of circumstances.

Inflation was soaring, interest rates increasing and, despite the tight jobs market, people were already battling to keep a roof over their heads or, in too many cases, even to find somewhere affordable to rent or buy.

Canberra's private sector had been hit hard by the pandemic, its associated lockdowns and social distancing regulations. Federal public sector spending in the ACT had also taken a hit from more than a decade of underinvestment by a succession of Labor and LNP governments.

Then, in what was the icing on the cake, it was revealed an egregious underestimation of the rate of ACT population growth by the ABS had denied Canberra upwards of a billion dollars of its share of GST revenue.

Mr Barr, quite rightly, took the view that with interest rates still at historical lows - despite the RBA's increases - this was not the time to cut up the credit card and to sell off the furniture to pay back the debt. The government instead stuck to its Keynesian guns by not slashing government spending at the same time the private sector and the federal government were pulling back.

This approach has served as a shock-absorber to protect the local economy in the past, most recently during the GFC, and it will do so again.

It is worth remembering that just on six years after becoming the Treasurer in 2012 Mr Barr was able to bring the budget back into balance in 2018/2019; just in time for the latest round of crises.

There is no reason, despite the grim prognosis handed down by Pegasus Economics, to believe this can't be done again; but it will take time, patience and discipline to get there.

Arguably the greatest single cause for concern identified by Pegasus was the growth in net debt from around $100 million a decade ago to about $5 billion today - and to $10 billion over the forward estimates. While it would be wrong to pin all the blame for this on COVID, the pandemic - coming as it did at a time when surging population growth was turbocharging demand for government services - didn't help.

Another serious worry is the anticipated shortfall in revenue created by the ACT's transition from stamp duty on property sales to rates and land taxes. Unless alternative sources of income can be found residential and commercial property charges are likely to continue to increase.

While Pegasus has questioned the population and economic growth estimates on which the ACT government is pinning its hopes for an expanded economic base, the last census revealed Canberra was growing much faster than anybody had predicted.

Differences between the CPI estimates used by Mr Barr and those from the RBA are equally problematic. Reading the economic rune stones is fraught with risk. Recent forecasts have come up very wide of the mark.

While there are some who will likely use the Pegasus review to call for cuts in spending on infrastructure such as light rail, that ignores the fact Labor and the Greens have won multiple elections on the back of this commitment.

Job creation, infrastructure and economic development, and population growth remain the most effective long term solution to the ACT's economic challenges.