The new treasurer will deliver an economic and fiscal update to the Parliament in the last week of July. He is due to hand down a new 2022-23 budget in October.
Former treasurer Josh Frydenberg handed down an early 2022-23 budget on March 29. That forecast inflation at 4.25 per cent for 2021-22 before edging down to 3 per cent through the upcoming financial year.
Since then,inflation pressures have grown. Inflation reach 5.1 per cent in the March quarter while the Reserve Bank now believes inflation could reach 7 per cent by year’s end.
Chalmers,speaking on the ABC’sInsiders program,said the7 per cent prediction by the Reserve Bank would not be “wildly off the mark”.
“Inflation will be significantly higher than what was expected in the last government’s most recent budget,what was expected at election time as well. Certainly higher than the 5.1 per cent we saw in the March quarter. This inflation problem will get more difficult,” he said.
“We will do the work between now and July to give people the most accurate assessment of where we think this inflation challenge is heading.”
Chalmers said that while inflation would accelerate,it was still expected to ease through 2023.