In this econ talk:
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.
