Australia's treasurer warns growth will be slower than forecast

· Economy · Australia

Australian Treasurer Jim Chalmers said the country's growth will likely be slower than the 1.75% forecast in May's budget, as a series of rate hikes and rising inflation start to bite on the economy. He said Treasury is revising all the numbers for the midyear budget update, with weaker growth and higher unemployment projected. Economists have warned of a difficult six months ahead. The deterioration reflects how higher borrowing costs are weighing on household spending and business investment, and sets up a tougher fiscal picture for the government.

Why it matters：A downgrade in one of the world's most commodity-exposed developed economies signals how higher rates are slowing growth globally.

Key points

  • Growth likely below May's 1.75% budget forecast
  • Midyear update will project weaker growth and higher unemployment
  • Higher rates and inflation are weighing on the economy

Sources (original reporting)

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