Chalmers warns of economic turmoil driving budget cuts, says Australia can avoid recession

Australian Treasurer Jim Chalmers has warned of "very substantial and intensifying" pressure on the federal budget, while maintaining that the country is not heading toward a recession, according to The Guardian.

Speaking Sunday, Chalmers pointed to the private sector as a driver of rising inflation in Australia amid the ongoing conflict in the Middle East, as he prepares to look for new ways to cut government spending ahead of the budget's mid-year update.

The treasurer called on critics of government spending to specify which services they believe should be cut, a response to ongoing political debate over fiscal policy. Chalmers' comments suggest the government is bracing for difficult budgetary decisions in the months ahead as it balances spending restraint against economic pressures.

Economic backdrop

Global economic conditions, including the effects of the Middle East conflict on energy and commodity markets, have contributed to inflationary pressures in a number of economies, including Australia's. Finance ministers across affected countries have faced similar questions about how to balance budget discipline with the need to support economic growth and avoid recession.

Chalmers' remarks come as the government prepares further budget announcements, with the mid-year fiscal update expected to detail how it plans to respond to the pressures he described.