By Renju Jose
SYDNEY (Reuters) -The Australian treasury expects costs from Tropical Cyclone Alfred to be about A$1.2 billion ($759 million), shaving off a quarter of a percentage point from its gross domestic product in the March quarter, Treasurer Jim Chalmers said on Monday.
Alfred hit land north of Brisbane, Australia’s third-most populous city, this month after being downgraded to a tropical low, triggering flash flooding and power outages in parts of the states of Queensland and New South Wales.
There would be "very substantial" economic costs from the storm damages, Chalmers said, a week away from presenting his final budget before the national election due by mid-May.
"We are getting a handle on the economic costs and we are getting a handle on the costs to the budget, and we will report our initial assessment of that in the budget on Tuesday next week," Chalmers told reporters in Brisbane.
Chalmers said he continued to expect the budget to return to a deficit after two years of rare surpluses, though the shortfall would be "much, much smaller" than what he had inherited from the opposition.
"A defining feature of our first three budgets was responsible economic management. That will be a defining feature of the fourth as well," Chalmers said.
The storm has likely spurred food inflation due to the damage to fruit and vegetable farms, Chalmers said, as his centre-left government fights to retain power. Recent polls showed the opposition Liberal-National coalition was slightly ahead of the Labor government.
There would also be upwards pressure on building and construction costs, Chalmers added.
More than 53,000 claims have been submitted for damages related to the storm as of Friday, the Insurance Council of Australia said.
Chalmers said he would give more details about the budget and other economic challenges in a speech on Tuesday at the Queensland Media Club.
He could detail during the speech the likely impact to Australia from U.S. President Donald Trump’s decision to impose tariffs, Australian media reported.
($1 = 1.5808 Australian dollars)