His comments come in response to the Organisation for Economic Co-operation and Development’s (OECD) economic outlook, which revealed the international organisation is expecting Australia to grow as fast as the fastest major economy this year, with the nation expected to grow much faster than any major advanced economy in 2026. However, the report stressed that significant risks to the economic outlook persist, including tariff increases, a resurgence of inflationary pressures and “elevated and volatile” crypto-asset valuations.
“Our economy is characterised by stability and opportunity in a global economy which is defined by uncertainty, unpredictability and volatility,” Treasurer Chalmers said.
The Treasurer claims the current Labor government has played a significant role in the local results.
“Inflation is down, real wages are up and unemployment is low; we’ve got the debt down and we’ve seen interest rates come down three times this year as well,” he said.
Despite the geopolitical uncertainty, global economic growth proved more resilient than anticipated in the first half of 2025, with the world economy expanding at an annualised pace of 3.2, but global growth is expected to moderate as the full impact of higher tariffs is felt.
Since May, the United States has raised bilateral tariff rates on nearly all countries. By the end of August, the overall effective US tariff rate reached an estimated 19.5 per cent – the highest level recorded since 1933.
“There’s a lot coming at us from around the world, we’ve got a lot of work to do, but we’ve got a lot going for us as well – the OECD report makes that clear,” Chalmers said.
The OECD noted that the unemployment rate has risen in Australia, as well as in South Africa, France, the United States, Germany, India and Canada. Signs of weakening labour demand are evident in the continued gradual decline in the ratio of job vacancies to unemployed individuals in Australia, as well as in the United States, Germany, the United Kingdom and Canada.
Overall, headline inflation in the G20 advanced economies is projected to be 2.5 per cent in both 2025 and 2026. While aggregate consumer price inflation for the G20 countries is expected to decline as economic growth and labour markets ease.
In regard to monetary policy, the OECD said central banks should remain vigilant and react promptly to shifts in the balance of risks of price stability.
“Provided inflation expectations remain well anchored, policy interest rate reductions should continue in economies in which underlying inflation is projected to moderate towards target. Maintaining central bank independence will preserve policy credibility and reduce the volatility and persistence of inflation,” the report said.
It comes after the latest Australian Bureau of Statistics data revealed August’s underlying inflation fell but the annual rate increased slightly to 3.0 per cent.
“We’ve been able to focus on getting inflation down at the same time as we maintain a focus as well on some of the bigger, longer term structural issues in our economy, like productivity,” Treasurer Chalmers said.
The OECD expects a gradual easing of policy rates to continue in Australia, Canada and the United Kingdom.
“This progress that we’ve made together on inflation has given the Reserve Bank the confidence that it has needed to cut interest rates three times in the space of six months this year,” Treasurer Chalmers said.
Stretched valuations across financial markets – including the rapid rise in crypto-asset market capitalisation – along with increasing links between banks and non-bank financial institutions highlight the need for heightened vigilance to protect financial stability.
The OECD report highlighted particular concerns around the impact of the evolving digital asset space on economies and said while they share certain traits with traditional financial products, they pose unique policy challenges due to their borderless and pseudonymous characteristics.
“The high price volatility of crypto-assets and their growing interconnectedness with the traditional financial system also raises financial stability risks,” the report revealed.
As of September 2025, crypto-asset market capitalisation reached approximately US$3.9 trillion – near record highs and a significant increase from US$830 billion in January 2023.
“Crypto-asset values are highly volatile compared to other asset classes, such as aggregate equity market indexes. The exposure of financial institutions to crypto-assets remains limited but is increasing with the expansion of crypto exchange-traded products and recent regulatory developments, particularly in the United States and the European Union.”
The OECD report said countries should maintain and enhance their efforts to develop and update regulations concerning cryptocurrency assets, noting the importance of international cooperation.
The development and spread of artificial intelligence (AI) technologies are expected to be a major driver of new economic opportunities, improving living standards and supporting asset valuations.
However, significant uncertainty remains over the pace of AI adoption and its impact on future productivity and growth around the world.
“Measures to improve digital skills and alleviate skilled labour shortages and improve the rule of law could also encourage businesses to invest in AI,” the report said.
“Adding the ‘faster AI adoption’ scenario presented in recent OECD work on AI, in which AI adoption rates are similar to those seen previously for mobile phones, to the assumed structural reform package scenario could raise average annual GDP growth by an additional 0.4 percentage points in advanced G20 economies.”
The OECD said prospects could be stronger if all countries enhanced their efforts to implement a broad range of structural reforms and new technologies, such as artificial intelligence, were adopted rapidly.
