China's softening economy is being closely watched for its impact on Australian business and consumers.
Treasurer Jim Chalmers rates China as the key global factor in his sights, as he prepares to release the latest Intergenerational Report.
"The softening of the Chinese economy, I think, is one of the risks that certainly we're most attentive to and that the global economy is watching most closely," Dr Chalmers told reporters in Sydney on Wednesday.
He said the global economy was in a tug-of-war between resilience and risk.
"On the resilience side, the American economy has held up especially well - the banking system has held up better than many expected and inflation is moderating," Dr Chalmers said.
"But there are risks as well. Some of those are geopolitical, Russia and Ukraine.
"Core inflation is more persistent in some parts of the world."
Senior government sources believe the global headwinds won't be enough to drive Australia into a recession in the coming year.
The GDP profile over the next 12 months was for small positives, the sources said, despite the lag effect of a series of interest rate rises by the Reserve Bank and China's woes.
Dr Chalmers said the Intergenerational Report would help Australians understand where the country is heading.
"And how we position ourselves to make our people the major beneficiaries of change, rather than victims of that change," he said.
"The IGR is all about how we maximise our advantages."
Beyond the global factors, the government is most closely watching inflation, consumption, the labour market, exports and migration.
Inflation is starting to moderate, consumption is easing as interest rates bite, the labour market is proving resilient, exports are strong despite prices coming off, and migration has been a positive.
However, there is patchiness in the domestic economy.
The RBA forecasts GDP to slow to 0.9 per cent over the year to December, down from 1.6 per cent over the year to June.
"Household consumption has already slowed considerably, with the slowdown expected to worsen as more households come off fixed-rate home loans," CreditorWatch chief economist Anneke Thompson said.
On the upside, CreditorWatch said population growth continued to have a positive impact on the economy, especially in driving demand for education, health and professional services.
Shadow treasurer Angus Taylor said the government had dropped the ball on inflation and could make it worse through policy changes.
"The (industrial relations) changes that they've brought forward are the wrong thing for the time," Mr Taylor told reporters in Ipswich.
"They haven't delivered on the $275 electricity price reduction that they promised ... and we don't need to see more red tape for businesses."
