Treasurer Jim Chalmers has warned families will be in for a tough economic time in coming months, ahead of an expected rise in inflation.

Inflation levels are set to rise when the latest consumer price index figures are released later this month.

Dr Chalmers said while inflation was set to flatten some time next year, there would be hip-pocket pain for Australians in the near future.

“Unfortunately, we expect this inflation challenge to get worse before it gets better, but it will get better,” Dr Chalmers told Sky News on Sunday.

“We expect inflation to moderate next year, but we’re in for a tough time for a lot of families.”

Inflation is currently sitting at 5.1 per cent, the highest level for two decades.

Dr Chalmers said the increase in inflation would also likely have a flow-on effect to the official interest rate.

The Reserve Bank of Australia will next meet on August 2, with a further rates rise expected.

It comes after the cash rate has risen in each of the past three months, with the rate now standing at 1.35 per cent.

“It’s self evident that inflation of the kind we’re seeing now will bring interest rate rises from the independent Reserve Bank,” Dr Chalmers said.

“That will clearly slow the economy or slow our expectations for economic growth in the near term, as interest rates rise in the manner that the governor of the Reserve Bank has indicated that they will.

“This will make life even tougher for a lot of Australians who are already dealing with the skyrocketing cost of living.”

Dr Chalmers has been with Reserve Bank governor Philip Lowe at the G20 summit for finance ministers in Bali.

The treasurer told the forum collective action was also needed to deal with global economic pressures that had been triggered by Russia’s invasion of Ukraine.

Coming off the back of unemployment figures falling to almost 50-year lows, Dr Chalmers said it was critical for more people to access opportunities in the jobs markets.

The latest figures saw the national unemployment rate drop from 3.9 per cent to 3.5 per cent, the lowest levels since August 1974.

“That unemployment rate was an incredibly strong and very welcome outcome,” Dr Chalmers said.

“It reinforces the need at our jobs summit to bring people together around some of the associated challenges with labour shortages and skills shortages.”