Jim Chalmers says Treasury is revising growth and unemployment forecasts
Australia’s treasurer says higher inflation and interest rates are weighing on the economy. The revised forecasts are being prepared for December’s midyear budget update.
Australian Treasurer Jim Chalmers said on Friday, 23 October, that Treasury was revising its economic forecasts toward slower growth and higher unemployment ahead of Australia’s December midyear budget update, The Guardian reported. The shift matters for households already facing higher prices and borrowing costs; the revised figures have not been released.
Chalmers said higher inflation and tighter monetary policy were weighing on domestic activity, according to The Guardian. In speech extracts reported before his remarks, he described the expected result as softer growth and slightly higher unemployment. Officials were still working on the forecasts when he disclosed the change.
What is changing in Treasury’s outlook
September unemployment had reached 4.7%, its highest level in nearly five years, according to jobs data cited by The Guardian. The forecast revision points to a weaker outlook from that backdrop, but Chalmers did not give the new growth or unemployment estimates. Treasury is preparing them for the December update.
Economist Jonathan Kearns told The Guardian that unemployment could reach 5%. Separately, financial markets on Thursday put the probability of a Melbourne Cup day interest rate rise at nearly 60%, according to an ANZ estimate reported by The Guardian. Neither figure is a Treasury forecast or a Reserve Bank decision.
Fuel prices add to inflation pressure
The Guardian reported that the global benchmark oil price had climbed to US$113 as the Middle East conflict widened. It calculated that petrol cost Australian motorists about 60 cents more per litre than before the US and Israel attacked Iran, adding $36 to a 60-litre fill. Higher fuel costs squeeze household budgets while complicating efforts to contain inflation.
Chalmers said decisions in Washington, Tehran and eastern Europe were pushing up inflation and weighing on growth worldwide, The Guardian reported. He pointed to cost-of-living help and responsible budget management as measures within the government’s reach. The Guardian described the trade-off facing ministers: another temporary fuel-excise cut would put money in motorists’ pockets, while large spending cuts could weaken activity and employment.
In his May budget speech, Chalmers set out Treasury’s earlier expectations for growth and unemployment and discussed a severe oil-price scenario. Treasury’s revised outlook is due in the December midyear budget update.
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Sources and context
- Jim Chalmers faces a world of hard choices where the solution to one problem makes the other worseThe Guardian
- Economy set to worsen, with higher unemployment and weaker growth on the way, Jim Chalmers revealsThe Guardian
- 2026–27 Budget speech, Parliament House, CanberraAustralian Treasury Ministers
AI-assisted article checked against the listed sources. NewsJaws did not conduct interviews or attend the reported events.