Australia’s economic outlook to be downgraded in budget amid global ‘deterioration’

Increasingly dire forecasts for the global economy will see last-minute downgrades to Australia's economic figures in next week's federal budget, with the treasurer, Jim Chalmers, warning of "an increasingly perilous path" for world markets and key trading partners.

The budget will forecast the UK economy to contract by 0.25% in 2023 and the US to grow by an anaemic 1%, with the government warning Australia would not escape a world slowdown.

"The budget will confirm the stark deterioration in the outlook for global growth and in several major economies, with some at risk of falling into recession," Chalmers said.

The treasurer travelled to Washington last week for meetings with the G20 finance ministers and the International Monetary Fund. He said the trip, coming less than a fortnight before his first budget, would help inform his understanding of looming economic trends.

Upon his return, Chalmers said his budget would revise down expectations of economic growth among key trading partners China, US, UK, India and Japan.

"The global economy is treading an increasingly perilous path and downside risks loom large - this was a clear message from meetings with my counterparts in Washington DC," he said.

"The budget will confirm the stark deterioration in the outlook for global growth and in several major economies, with some at risk of falling into recession."