WA could lose credit rating, says McGowan

There is a "strong possibility" Western Australia will have its credit rating downgraded as the state continues to battle its massive deficit and debt, the premier has warned.

Mark McGowan said he and Treasurer Ben Wyatt were concerned about WA's credit rating after the Liberal opposition refused to back a $392 million gold royalty hike.

"We are gravely concerned about the loss of the credit rating," Mr McGowan told reporters on Friday.

"There's a strong possibility based upon the finances we inherited and based upon the loss of the gold royalty in the upper house that we could lose a credit rating."