Once obsessed with Western Australia's AAA credit rating, Treasurer Troy Buswell is now philosophical about the prospect of losing it.

Mr Buswell hopes for continued strength in iron ore prices, which are currently sitting around $US154 per tonne, compared to the WA government's Mid Year Economic Review forecast in December of a $US118.40 per tonne average this financial year.

Things started looking up in the March quarter when prices eclipsed that estimate as Chinese steel mills stockpiled the commodity - typical for that time of year.

Thursday's economic update from Treasury may well show more bullish projections, given the WA government's iron ore price estimates over the outyears to 2015/16 averaged about $US107 per tonne.

But most analysts expect prices will fall to around $US100 per tonne in the longer term.

While the state government expects a modest $140 million surplus this financial year, it has flagged a $187 million deficit in 2013/14 - the first in 13 years - which Mr Buswell has previously said is a gap that could easily be closed if some of projections turned out to be too pessimistic.

He suggested the same at a press conference in Perth on Tuesday, shrugging off a recent warning from ratings agencies that the state may lose its AAA credit rating due to high debt levels.

Major infrastructure spending is expected to lift net debt beyond the WA government's previously hallowed $20 billion debt ceiling in 2015/16, but there's no sign the transformative plans will be curbed or deferred.

Mr Buswell told reporters the WA government's decision to increase debt levels was a conscious one because it would be used to pay for much-needed infrastructure in the state.

"And we stand by that," he said.

Debt levels hadn't been helped by lower GST funds.

Losing the AAA rating would probably mean paying more for debt, he conceded.

"Perhaps the price you pay for it may go up," he said.

"And as I said at the time of the Mid Year Review that the amount that we had forecast then as a deficit to the 2013/14 financial year was something we would tackle.

"There has been a significant increase in the iron ore price since then.

"There's also been a slight movement in the exchange rate.

"If you look around Australia at the state finances, we have been doing a very good job in WA in what is a volatile environment."