Dr Chalmers will hand down a budget statement to parliament on Thursday, which will show slowing economic growth and higher inflation.
New figures will indicate GDP grew 3.75 per cent in 2021/22, instead of the 4.5 per cent estimated before the election.
The forecast for GDP growth in 2022-23 has been revised from 3.5 per cent to three per cent.
Growth is expected to slow further in 2023-24, at two per cent, down from the 2.5 per cent previously predicted.
Off the back of another rise in inflation on Wednesday to 6.1 per cent, Dr Chalmers said people should brace for a further hike.
"We expect inflation north of seven per cent by the end of the year but then we expect it to moderate after that," he told the Seven Network on Thursday.
"There will be a difficult period ahead for many Australians as we try and deal together with these pretty extreme cost of living pressures."
The treasurer's statement will not focus on budget forecasts - he's saving that for a new Labor budget in October - but it will paint a picture of what Australians can expect when it comes to the budget bottom line.
The latest monthly financial statement for May released by the Department of Finance showed the 2021/22 underlying budget deficit sitting at $33.4 billion.
This was an improvement from the $79.8 billion deficit forecast in the former coalition government's 2022/23 budget handed down in March.
Australia is outperforming much of the world but inflation is making it hard for people to pay the bills, Dr Chalmers says.
"Our high inflation is primarily but not exclusively global," he will say in his speech.
"It will subside but not overnight."
Shadow Treasurer Angus Taylor says more concrete action from the government is needed to ensure the budget is in good shape.
"What we don't need from the government is painting a picture, we need a plan. There are many things that can be done to address this," he told ABC TV on Thursday.
"We need a plan and one that can help to address these issues in a tough economic context."
Mr Taylor said economic solutions were needed in order to prevent further interest rate rises, while also deflecting suggestions the previous government was to blame for the tough conditions.
"If you don't act on the budget side, then the Reserve Bank will need to raise interest rates further and impose more pain," he said.
"We were tightening the belt, we recognised that you need to avoid fuelling inflation, that is what we need to see from the government. You can't choose the context you work with in government."
The International Monetary Fund has meanwhile downgraded its outlook for global growth and warned the world is on the brink of recession, if risks from high inflation and the Ukraine war are left unchecked.
The economic support agency has forecast real GDP to slow to 3.2 per cent in 2022, compared to its April forecast of 3.6 per cent.
It added that world growth had contracted - or turned negative - in the second quarter due to downturns in China and Russia.
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