Treasurer Jim Chalmers says he will offer ‘confronted’ economic news in a statement to Parliament when he returns next week

Treasurer Jim Chalmers has revealed he will deliver a grim assessment of the state of the national economy on July 28 when he delivers a statement to Parliament.

Mr Chalmers held a press conference on Monday afternoon where he warned that the global economy was in a “dangerous” and “difficult” situation.

“This combination of inflation and rising interest rates, slowing growth and food and energy insecurity, combined with the amount of debt accumulated by countries, is a source of concern for the global community,” did he declare.

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The Treasurer said Australia was in a similar place to the rest of the world – but said the Albanian Labor government had the right economic plan in place.

He also added that the new government had inherited “the most delicate set of economic circumstances” in recent times, but stressed that savings would be made in the budget.

“Australia obviously has its own share of economic challenges, and they are similar to many of those faced by other countries,” he said.

“We have the right economic plan for these conditions. We will find further savings in the budget.

“The main task of every budget is to ensure that we get the best value for taxpayers’ money, which is increasingly more expensive in service because every extra dollar in the budget is a borrowed dollar.

“If you think about the impact of these rising interest rates on the budget, over $1 trillion this year, over $5 billion last year… those are no lesser amounts of money. “

Parliament will return on July 26 and Mr Chalmers is expected to make his ministerial statement on July 28.

“The news contained in this statement, in many ways, will be confronting,” he said.

“As far as our inflation expectations are concerned, as regards the impact of higher interest rates on growth, as regards what this inflation surge means for real wages – it There will be aspects of this ministerial declaration that people will find confronting.

“My job is to paint an accurate picture of the economy and our economic issues.

Earlier this month, the Reserve Bank of Australia raised the interest rate again from 0.50% to 1.35%.

The move was widely expected and followed last month when it was also raised from 0.5% to 0.85% – its biggest rise since February 2000.

In a statement, Governor Philip Lowe cited global inflation “boosted” by COVID-related supply chain disruptions, the war in Ukraine and strong demand as the main reasons for the rise.

“Inflation in Australia is also high, but not as high as in many other countries,” the statement said.

“Global factors explain much of the rise in inflation in Australia, but domestic factors also play a role.

“Strong demand, a tight labor market and capacity constraints in some sectors are contributing to upward pressure on prices. The floods are also affecting some prices.”

Mr Lowe suggested that inflation should peak later this year and then fall back into the 2-3% range in 2023.

“As global supply issues continue to ease and commodity prices stabilize, even at a high level, inflation is expected to moderate.

“Higher interest rates will also help establish a more sustainable balance between demand and supply for goods and services. Medium-term inflation expectations remain well anchored and it is important that this remains the case. “

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