Reported at smallcaps.com.au: Rapidly rising state debts in Victoria and New South Wales are threatening Australia’s AAA credit rating, as ratings agencies express alarm over the substantial increase in state borrowing since the COVID pandemic.

Fitch predicts that state gross debt could rise to nearly 20% of GDP by 2028, despite federal budget surpluses, largely driven by extensive infrastructure spending. Victoria has become particularly concerning with its debt levels predicted to reach $228 billion, potentially surpassing New South Wales, while the state’s household income has significantly declined since 2019.