Australia should be able to avoid a recession despite serious risks facing the global economy, the country’s treasurer has said.
Speaking ahead of his government’s first budget in two weeks, Treasurer Jim Chalmers said he did not expect the Australian economy to “go backward” despite the global economy being in a “dangerous place”.
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But Chalmers, who will deliver his first budget since the centre-left Labor Party’s election win in May, said Australia would not be “immune” from an expected global downturn and warned that soaring energy prices continued to put households under strain.
“We can expect substantial downgrades to the global growth outlook in the budget,” Chalmers told reporters on Tuesday ahead of the October 25 budget.
“It won’t be fancy. It won’t be flashy. It will be responsible. It will be solid.”
Fears of a global recession are rising as slowing growth in major economies and rising interest rates cloud the outlook for the coming year.
On Monday, the heads of the International Monetary Fund and World Bank warned of the growing likelihood of a worldwide recession in 2023.
Australia’s central bank last week broke with the global trend of aggressively lifting interest rates, pointing to the increasingly negative outlook for the global economy.
The Reserve Bank of Australia unveiled a smaller-than-expected quarter percentage point hike, citing the deteriorating picture as a source of “uncertainty” for the domestic economy.