Australia’s Treasurer, Jim Chalmers, has issued a warning about how events in the Middle East are affecting the global economy. He indicated that these events, coupled with concerns about inflation and weaker growth, will influence the government’s budget due in May.
During recent meetings with G20 finance ministers and central bankers in Washington, Chalmers highlighted the challenges facing the global economy. In light of these global challenges, he emphasized the importance of responsible budgeting and security measures in the upcoming budget. He stressed the need to address cost-of-living pressures, repair the budget, and reform the economy to mitigate risks escalating worldwide.
The treasurer announced that the treasury will revise its growth forecasts for key trading partners, including China, Japan, and Britain. Forecasts for China’s 2024 growth have been slightly increased to 4.75%, but the outlook for next year has been decreased by 0.25 percentage points to 4.25%. Similarly, Japan’s growth forecast for this year has been lowered by 0.25 percentage points to 0.75%.
Despite these challenges, the government is expected to report a budget surplus for the fiscal year ending June 30. However, it may be smaller than in previous years due to falling commodity prices and a softening labor market. The government’s focus will be on managing these economic uncertainties and ensuring stability in the face of global turmoil.
Chalmers also expressed his concern about rising energy costs caused by geopolitical tensions between Russia and Ukraine. He stated that this could lead to higher inflation rates globally which would negatively impact economies worldwide.
In conclusion, Australia’s Treasurer Jim Chalmers is taking a cautious approach towards managing economic risks arising from various factors such as events in Middle East, inflation concerns and weaker growth forecasts. The government is focusing on responsible budgeting while addressing cost-of-living pressures and reforming
