SYDNEY (Reuters) - Australia's treasurer warned on Monday that events in the Middle East are fueling concerns for the global economy and will shape the government's budget in May, with near-term outlook downgrades for its major trading partners.
"Events in the Middle East are casting a shadow over the global economy, compounding the concerns about lingering inflation and weaker growth," Treasurer Jim Chalmers said in a statement.
Chalmers has just finished a trip to Washington where he attended meetings of G20 finance ministers and central bankers.
"Given the global challenges coming at us, the May Budget will put a premium on responsibility and an emphasis on security," he said.
"Relieving cost-of-living pressures, repairing our budget and reforming our economy is the best antidote to the kinds of risks that we see escalating around the world."
The treasury will also downgrade its growth forecasts for economies like China, Japan and Britain.
It is set to revise up its China 2024 growth forecast slightly to 4.75% but cut the outlook for next year by 0.25 percentage points to 4.25%. Japan's forecast for this year has also been lowered by 0.25 percentage points to 0.75%.
The government is expected to report a budget surplus for the year ended June 30, although the revenue upgrade would be smaller than the year before as commodity prices fell and labour market softened.