Low commodity prices a hit to budget

Low commodity prices are a positive for global economic recovery but not nearly as good for an Australian treasurer framing his second budget.

That's the message coming out of an economic outlook conference in Canberra.

World Bank economist Ayhan Kose believes the world economy is still "limping along", stymied by weak global trade despite low commodity prices and improved financial conditions.

As such, the outlook is still uncertain.

At the start of every year, since the global financial crisis in 2008, the World Bank has been asking what shape the recovery will take.

"We are still asking that question," Mr Kose told Australian Bureau of Agricultural and Resource Economics and Sciences conference on Tuesday.

National Australia Bank chief economist Alan Oster sees the performance of the world's largest economies as mixed.

Growth in Europe was poor, Japan was misfiring while the US and China were pretty solid.

For the Australian economy, national income had declined due to the sharp drop in iron ore prices even though export volumes had increased.

While that was positive for economic growth, net national income was about $30 billion less a year.

The resulting lower company tax and royalties receipts meant a $30 billion cut in revenue over the budget's four-year forward estimates.

Mr Oster expects iron ore and oil prices to remain low for a "long time" because of over-supply.