The federal budget update released on Thursday predicted the deficit would grow to $184 billion this financial year.

About $7.6 billion is expected to be wiped out of the national pool of GST revenue.

Chief Minister Andrew Barr says it means the ACT - which currently takes a two per cent share of the pool - will lose about $140 million in revenue in 2020-21.

"Our single largest revenue source has taken quite a haircut," he said.

"That is expected to remain a challenging situation for every state and territory for the next few years."

Mr Barr is due to release the territory's latest budget update next month.

He says the deficit for the 2019-20 financial year will be in the hundreds of millions, while the following year's will be even larger.

ACT's total debt to gross state product is currently about 7 per cent but is expected to rise significantly

Mr Barr said it was crucial the federal government did not make cuts to the public service.

"The absolute worst thing they could do to our economy and our region would be to throw people out of work," he said.

He said the Commonwealth should invest in more infrastructure projects in the ACT, including by funding expansion projects at national institutions beyond the Australia War Memorial.