Speaking on ABC’s Insiders on Sunday, the Treasurer said inflation will continue to rise from the 5.1 per cent headline rate revealed in March.
“That's the expectation across the board now, and so that's a difficult situation that we need to deal with before inflation hopefully moderates throughout the course of next year,” Mr Chalmers said.
“That's an important part of the puzzle, as is wages growth built on a better trained, more productive workforce.
“Those are the issues that we're confronting, these are our focuses in the budget and beyond that too,” the Treasurer said.
Mr Chalmers confirmed he will deliver the government’s forecasts for inflation as part of his ministerial statement when parliament returns next month.
“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,” Mr Chalmers conceded.
“I'll update that forecast towards the end of July, and we'll take into consideration the most recent information that we have about the economy, but the Reserve Bank has said something around 7 per cent and that doesn't seem to me to be wildly off the mark.
“But we will do the work between now and the end of July to give people the most accurate assessment of where we think this inflation challenge is heading.”
Back in May, the Reserve Bank predicted inflation would peak at 6 per cent before revising that figure up to 7 per cent partly due to external factors such as the war in Ukraine and global supply issues.
“That's a very high number and we need to be able to chart a course back to 2 to 3 per cent inflation,” Philip Lowe said earlier this month.
Parliament is due to return in late July with the Treasurer set to make a key economic statement before an October budget.
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
