In the mid-year budget review, the Western Australian government projected the state's finances to be $2.5 billion in the black for 2025/26, up from $2.4 billion forecast in June.
Treasurer Rita Saffioti said WA was on track to deliver its eighth consecutive operating surplus this financial year.
"Despite ongoing global uncertainty, the WA economy continues to outpace the nation," she said on Thursday.
The domestic economy grew by 3 per cent over the year to September, compared to 2.2 per cent nationally, with the private sector investment accounting for two-thirds of the growth.
"WA has grown by 26.7 per cent over the last five years," Ms Saffioti said.
"That's the strongest of any other state or territory, and stronger than the national average."
Healthy iron ore and gold prices, higher-than-expected population figures, and government spending were behind the strong fiscal performance.
WA's population growth also continues to outpace the rest of the nation, with 2.2 per cent expected for 2024-2025, up from 1.9 per cent predicted in June.
Major investments in the review include a $1.9 billion boost to health services and an additional $435 million for affordable and social housing development.
A further $502 million has been allotted for community services, including $300 million for the WA Stolen Generations Redress Scheme
Family and domestic violence services will get a $110.5 million boost, and $623 million has been earmarked for community safety and expanding the prison system.
A further $1 million has been allocated for advertising in the ongoing fight over the GST carve-up, currently under review by the Productivity Commission.
"The focus of this mid-year review is steady as it goes, but making sure we fund key priorities like the health and housing portfolios," Ms Saffioti said.
The government's planned infrastructure spend is also up by $3.8 billion, increasing to $41.8 billion by mid-2029.
Net debt is expected to rise to $35.7 billion at the end of the current financial year, $3.2 billion less than forecast in June, and expand to $42.1 billion over the forward estimates.
The review also shows net debt at June 30 was $30.1 billion, $3.4 billion lower than the $33.5 billion forecast in the 2025/26 budget.
The state is expected to stay in the black with operating surpluses between $2.9 billion and $3.1 billion predicted over the next four years, up from the $2.4 billion to $2.8 billion forecast in June.
Economic growth is forecast to be 2.25 per cent for the current financial year, down from 2.5 per cent six months ago, with 3 per cent growth expected in 2026/27 and 2.5 per cent in 2027/28.
The Chamber of Commerce and Industry WA welcomed the focus on housing supply.
"The housing crisis is not only hurting families, it's a hit to businesses and our economy as well," head of policy Anthea Wesley said.
"All strategies will need to be put on the table to ensure housing does not become a critical handbrake on the ongoing growth and diversification of the economy."
The Chamber of Minerals and Energy WA said the resources sector was a significant contributor to the state's ongoing strong financial performance.
"The simple truth is WA would be unrecognisable without mining," chief executive Aaron Morey said.
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