The Treasury is warning that forecasts for the economy in last month's Budget may now be too optimistic.
Acting Treasury Secretary Gabriel Makhlouf says the outlook for the world economy has deteriorated since the Budget's forecasts were finalised in the middle of April.
He says a weakening in the United States and China's economies has pulled down commodity prices, and concerns over the European debt crisis have intensified.
The Budget included downside scenarios for the economy as well as a central case. These painted a scenario of rising prices and higher interest rates, especially in developing countries, slowing world growth.
Mr Maklouf says the outlook for the economy is still a long way from such a scenario.
