Deputy Prime Minister Julia Gillard predicts that higher unemployment rates will be a part of the government's revised economic forecast in the May budget.
Ms Gillard said on Friday she would not speculate on the unemployment rate following a new International Monetary Fund (IMF) report that predicted unemployment would rise from 5.7 per cent to 7.8 per cent next year.
"We're going to update our forecast for unemployment very soon. It's only a matter of weeks away," she said.
"Rather than speculate on what the numbers could be, we will publish the official forecast."
However, she admitted higher unemployment was inevitable.
"I do want to be very clear with Australians and very honest with Australians, this global recession is hitting Australian jobs," she said.
"We have seen jobs lost already, we have seen the unemployment rate go up and we will see the unemployment rate go up further."
Mr Rudd and senior government ministers on Thursday made dire predictions about the budget after the IMF report predicted the economy would shrink by 1.4 per cent this year and unemployment would rise.
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