Australians are being told they should be optimistic about the nation's economic prospects despite a gloomy global forecast, but have also been advised to manage their expectations.
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Treasurer Jim Chalmers says the government is working to strike the right balance in the upcoming May budget between cost of living relief and not adding to inflation.
The International Monetary Fund warned of a stalling global economy and a roadblock to recovery, with global growth over the half decade set to be the worst in 30 years.
Global growth is expected to hover around three per cent over the next five years, the lowest medium-term forecast since the 1990s and below the two-decade average of 3.8 per cent.
IMF managing director Kristalina Georgieva said nations needed to focus on three priority areas: fighting inflation, improving medium-term growth and international co-operation.
"The global community may also have a long walk ahead of us," she said in an address overnight.
"We should stay laser-focused on the glorious vista of a future with stronger and more inclusive growth."
Dr Chalmers said high inflation and interest rates internationally as well as the war in Ukraine and rumblings within the global financial system were contributing to the slower growth and greater uncertainty.
"Australians should be optimistic about the future of our country but realistic about the challenges we face, and how the slowing global economy will affect our own prospects," he said.
"We'll continue to take account of international developments as we finalise the budget over the coming weeks."
Australian Associated Press
