‘A bigger scar’: prolonged war in Middle East could slash $16.5bn from Australian economy, Chalmers warns

<p>Treasurer likens impact of conflict to recent major shocks, including global financial crisis and Covid pandemic</p><ul><li><p><a href="https://www.theguardian.com/australia-news/live/2026/mar/18/australia-news-live-trump-iran-nato-hormuz-interest-rates-rba-cost-of-living-jim-chalmers-economy-fuel-price-crisis-ntwnfb">Follow our Australia news live blog for latest updates</a></p></li><li><p>Get our <a href="https://www.theguardian.com/email-newsletters?CMP=cvau_sfl">breaking news email</a>, <a href="https://app.adjust.com/w4u7jx3">free app</a> or <a href="https://www.theguardian.com/australia-news/series/full-story?CMP=cvau_sfl">daily news podcast</a></p></li></ul><p>Inflation could peak at 5% this year and petrol price hikes continue to slug motorists until 2029, according to new forecasts released by the treasurer, Jim Chalmers.</p><p>Ahead of Thursday’s meeting of national cabinet, set to discuss fuel disruptions and economic shocks emanating from the war in Iran, Chalmers released Treasury modelling suggesting a long lasting conflict in the Middle East could see Australia’s GDP 0.6% lower in 2027.</p> <a href="https://www.theguardian.com/australia-news/2026/mar/18/anthony-albanese-national-cabinet-iran-war-fuel-shortages-self-reliance-economic-resilience">Continue reading...</a>