(Bloomberg) -- Australian Treasurer Jim Chalmers said he expects upcoming data to show encouraging progress in combating inflation but acknowledged the central bank may not be ready to cut interest rates this week.

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Inflation will slow to 2.7% in August from a year earlier, according to the median estimate of economists ahead of the Wednesday data release.

“Whether it’s in the low threes or in the high twos, what it will show is that inflation in monthly terms is around half what we inherited a couple of years ago when we came to office,” Chalmers told Sky News Australia Sunday. “That would be welcome and encouraging progress. We are broadly on the right path.”

The Reserve Bank of Australia will leave the cash rate target at 4.35% on Tuesday, according to all 31 economists surveyed by Bloomberg. Governor Michele Bullock said earlier this month policy will need to remain “sufficiently restrictive” until CPI moves sustainably toward its 2-3% target.

Chalmers said the central bank makes its decisions independently and considers a range of factors.

“The quarterly inflation number is usually the one they focus on a bit more substantially than the more volatile and more unpredictable monthly number,” he said. “They look at the unemployment figures. They look at broader growth in the economy and some of the other data around consumption. And they’ll weigh all of that up.”

Chalmers said the government is doing its part to slow inflation by producing consecutive budget surpluses. He said the confirmed budget balance for the 2023-24 year is likely to be announced on Sept. 30 and reiterated it will show a surplus much larger than A$9 billion ($6.1 billion) announced in May.

“That’s because of our spending restraint and our responsible economic management,” he said. “The Reserve Bank governor has said that those two surpluses that we’ve now delivered are helping in that fight against inflation.”

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