Federal Treasurer Jim Chalmers says the cost of living will get even tougher in coming months, with economic "heavy weather" building on the horizon.
Mr Chalmers will give a statement to parliament today on Australia's confronting economic prospects, and is warning inflation will surpass 7 per cent this year.
Economic growth has been revised down by half a percentage point for the previous, current and next financial years.
Mr Chalmers said Treasury had also forecast unemployment to rise.
"When you've got rising interest rates and you've got dramatically slowing global growth … that has implications for the unemployment rate," he said.
"Things are very difficult already for a lot of Australians. It will get more difficult before it gets better."
But the Treasurer pointed to clearer skies further out, saying inflation should peak at 7 per cent before moderating, and Australians would see a real wage increase hit their wallets before the end of the government's term in 2025.
Shadow Treasurer Angus Taylor said the dire economic conditions were not of the government's making, but it did control how it responded.
"These are tough circumstances. There's a significant global element to it, there's no doubt about that," Mr Taylor told ABC Radio.
"The economic curve balls and health curve balls come at you in government.
"If we had said during the pandemic, 'We're not going to do anything until the next budget,' you and others would have said, 'Hang on, that's not good enough.'
"What we need to see is a coherent plan, not a picture being painted."
The Shadow Treasurer urged the federal government to cut spending in light of the weakened growth figures.
He suggested the government drop parts of its plan to upgrade energy infrastructure.
"They are committed to $20 billion of transmission line investments, for instance … It is not recommended by the market operator," Mr Taylor said.
"This is an illustration of the sort of spending that is not necessary in an environment where you are going to create inflationary fires."
