Good morning. Jim Chalmers will paint a less-than-positive picture of the country’s finances as he uses the state of the economy speech to outline the challenges ahead. The Federal Reserve has again raised its benchmark interest rate as the US teeters on the edge of a recession. And Australia is failing to hit more than two-thirds of its Closing the Gap targets.
The treasurer will use today’s state of the economy speech to trim the national growth estimates, citing global economic “headwinds” including higher inflation and slowing global growth. “Australia is outperforming much of the world but that doesn’t make it easier to pay the bills at home,” Chalmers will say. Instead of the 4.25% growth in 2021-22 as estimated before the election, GDP growth will come in at 3.75%. An IMF economist, Pierre-Olivier Gourinchas, has said the world is “on the edge of a global recession”. But others are more optimistic, at least in terms of inflation.
