Treasurer Jim Chalmers has called his budget “ambitious in the face of adversity”.

Speaking to reporters in the lockup on Tuesday, he acknoweldged his latest budget is “not exactly the same budget we would have handed down in February for obvious reasons”.

The main adversity is a Middle East war which has disrupted around a fifth of global seaborne oil and gas supply. It has also hit global supply chains for fertiliser, chemicals, aluminium and plastics. Treasury assumes the global economy will slow from 3.5% growth in 2025 to 3% in 2026.

As a consequence, the Australian economy is forecast to suffer a similar slowdown, with inflation rising more quickly than previously forecast.

The updated Treasury forecasts in the federal budget envisage growth in the Australian economy will slow from 2.75% growth in 2025-26 to a modest 1.75% next year.

Australia’ exports are forecast to barely grow at all – just 1%. Adding to the gloom for exporters, the prices of our key commodity exports – iron ore, coal, LNG and gold – are assumed........

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