As communities begin their recovery from ex-Tropical Cyclone Alfred, the economic implications are becoming increasingly apparent.

Treasurer Jim Chalmers is expected to announce in a speech on Tuesday that the estimated economic cost of the cyclone will be around $1.2 billion, a factor that could influence the federal budget and inflation rates significantly.

Chalmers will provide preliminary figures indicating that the cyclone's impact may detract up to a quarter of a percentage point from Australia’s Gross Domestic Product (GDP) for the current quarter.

He noted the ongoing assessment of the cyclone's economic fallout, indicating that it is anticipated to be substantial.

In collaboration with state governments, the Commonwealth is preparing to allocate approximately $30 million for immediate recovery efforts, aimed at repairing damaged roads and infrastructure.

Financial assistance is also being directed to support affected individuals through hardship payments and allowances.

Chalmers highlighted that the forthcoming budget will capture these immediate costs and incorporate provisions for anticipated future expenses.

The expenditure linked to Cyclone Alfred is expected to increase the government's disaster support total to $13.5 billion, up from $11.6 billion, as outlined in the Mid-Year Economic and Fiscal Outlook (MYEFO).

Approximately five million Australians were placed at risk during the cyclone, with nearly two million homes threatened by its impact.

In addition to addressing the consequences of the cyclone, Chalmers’ speech will likely touch on the potential economic effects stemming from the escalating global trade tensions.

In a related development, the Deloitte Access Economics' Budget Monitor released on Monday forecasts an underlying cash deficit of $26.1 billion for Australia, with projected revenue downgrades totaling $11.3 billion over four years.

This projection represents a slight improvement over the $26.9 billion deficit estimated in the December MYEFO.

However, concerns about the persistent deterioration of the budget remain.

Stephen Smith, co-author of the report, emphasized the necessity for caution among politicians considering the introduction of any pre-election spending initiatives, referencing the long-term projections of ongoing deficits that could strain the national budget further.

Since the MYEFO was published, the government has added over $18 billion in new spending commitments, including an $8.5 billion increase to Medicare and $7.2 billion allocated for the Bruce Highway.