Victoria's hefty infrastructure program ensures its after-capital account remains in large deficit. Debt levels continue to grow steadily, albeit at a slower pace than in recent years, thanks to improving operating balances and rising revenues. Victoria's commitment to controlling operating costs and stabilizing debt levels relative to the gross state product should slowly rebuild some fiscal buffers that were eroded during the COVID-19 pandemic. That said, debt will be structurally higher. We affirmed our 'AA' long term and 'A-1+' short term ratings on Victoria. The outlook on the long-term rating is stable. The stable outlook reflects our expectation that Victoria's operating balance will improve over the next two years. This should help narrow after-capital account deficits and slow growth in
