A pedestrian stands on the corner of a flooded street as heavy rains affect Sydney, Australia, Oct 6, 2022. (LOREN ELLIOTT / REUTERS)
CANBERRA – Flooding in Australia's southeast will harm the country's projected economic growth, the treasurer has confirmed.
Ahead of handing down his first federal budget on Tuesday, Jim Chalmers on Friday said modeling suggests floods in Tasmania, New South Wales and Victoria will wipe 0.25 percent off gross domestic product (GDP) growth in the final quarter of 2022
Ahead of handing down his first federal budget on Tuesday, Jim Chalmers on Friday said modeling suggests floods in Tasmania, New South Wales and Victoria will wipe 0.25 percent off gross domestic product (GDP) growth in the final quarter of 2022.
Thousands of homes and businesses have been affected by the floods, with more rain expected over the weekend.
ALSO READ: Heavy rains ease in Australia's NSW, flood warnings remain
The Treasury forecasts the floods will drive the price of fruit and vegetables up by 8 percent over the next six months.
However, inflation is still expected to peak at 7.75 percent. Chalmers said the big ongoing contributor to inflation increasingly will be the impact of these natural disasters and the impact of higher electricity prices.
The Labor government said its first budget since winning May's election will have a focus on addressing the rising cost of living.
READ MORE: Thousands of homes may be inundated in flood-hit Australia
It will include about 1.5 billion Australian dollars (about 877 million U.S. dollars) in previously announced emergency payments for flood victims and a 3 billion Australian dollars (1.8 billion U.S. dollars) reserve fund to respond to future disasters.
"We don't know yet whether that 3 billion Australian dollars will be sufficient but we consider it prudent," Chalmers said in a press conference in Canberra on Friday.
"This is just an initial estimate. The costs could be even more significant, but responding to natural disasters and building resilience in our economy will be absolutely central features of the budget that I hand out next Tuesday night."