‘We’re hostage’: Treasury models worst-case scenario for Middle East war
Jim Chalmers warned the impact of the Iran war could become “quite severe” on the economy, as Treasury modelled a worst case scenario where oil prices hit USD200 per barrel.
Treasurer Jim Chalmers insists Australia would avoid recession under Treasury’s worst-case modelling of the Middle East war, which would see inflation soar above 7%.
The war has for months loomed over the budget, and US President Donald Trump sparked fears of a prolonged conflict by warning a tenuous ceasefire was on “on life support” on Tuesday.
In a rare move, Treasury has revealed various models of a conflict with no clear endpoint, and which has already caused disarray in the global economy.
Speaking to reporters hours before delivering his fifth budget, Chalmers said he had attempted to “give [Australians] a sense” of the various risks being war-gamed.
