This report does not constitute a rating action. MELBOURNE (S&P Global Ratings) May 23, 2023-- Victoria 's fiscal outlook is improving after several years of pandemic disruption, providing some headroom at the 'AA' rating. We consider fiscal recovery will be a slow and long process. Today's budget is in line with our fiscal forecasts. It shows the government's cash operating balance, at the nonfinancial public sector level, could reach surplus in 2025, for the first time since 2019. Despite some positive developments, Victoria's fiscal outlook remains weak compared with other Australian states. Victoria should be able to cut its after-capital account deficit by roughly half, to about 18% of total revenues between 2023 and 2025, compared with that in 2021
