The ACT's credit rating has been downgraded from AA+ to AA by international ratings agency S&P Global Ratings.

The group cited the territory's proportionally high debt relative to other Australian jurisdictions, and the likelihood the budget will remain in deficit until 2027.

S&P singled out the ACT's rising health costs and major infrastructure projects as factors contributing to its financial position.

The agency said it expected the territory's budget to return to a "slim operating surplus" in 2027, which would mark five operating deficits since 2022.

"An increase in capital spending, including for new projects added to the pipeline in the latest budget, is likely to push ACT's deficits after capital accounts above 10 per cent of total revenue over the next two years," S&P said.

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