Iran War set to deliver higher inflation and interest rates despite weaker economy

The Reserve Bank has a big job ahead of it bringing pricing behaviour and inflation pressures under control, according to Infometrics’ latest economic forecasts. The economic forecaster predicts that higher fuel prices will drive inflation up to 4.8%pa in the current quarter – an immediate outcome of the 2026 Iran War that the Bank can do little about. But even with an assumption that fuel prices moderate in the second half of 2026, inflation is still forecast to be at 3.9%pa in March next year and 3.0%pa by December 2027, with second-round effects from the fuel price spike rippling across the economy for several quarters.

Forecasts in Five: Infometrics April 2026 Forecasts

Hawkish hold for the OCR in April

Infometrics CE and Principal Economist Brad Olsen and Chief Forecaster Gareth Kiernan discuss the oil price and supply shock.

Economic ramifications of the Middle East conflict

Oil prices soar as war breaks out in the Middle East

GDP up just 0.2% as momentum faltered pre-war

Infometrics Principal Consultant Rob Heyes and Principal Economist Nick Brunsdon discuss the regional recovery so far.

How the regional economic recovery is taking shape

Unemployment, jobs, participation all up in Q4 2025

Infometrics CE and Principal Economist Brad Olsen and Chief Forecaster Gareth Kiernan discuss the outlook for the economy in 2026.

The outlook for 2026

Inflation rises to 3.1%pa in Q4

GDP rebounds 1.1% in Q3

Infometrics copyright

Brad Olsen

Chief Executive and Principal Economist

Gareth Kiernan white bg.jpg

Gareth Kiernan

Chief Forecaster, Director

Additional stimulus drives faster growth, but creates interest rate risks

Additional stimulus drives faster growth, but creates interest rate risks

Latest videos