The risk of a recession escalates as the Middle East war continues | The Business | ABC NEWS

The economic shock from war in the Middle East is hitting home. There's pain at the pump, prices are spiraling and fears are building that Australia could face a recession. Amid the oil price shock, businesses and consumers are on edge and pulling back. Businesses are facing fuel surcharges, higher costs and fear there could be lockdowns amid petrol shortages. Consumers are slashing spending. And economists worry an ongoing war heightens the risk of a recession, while the Reserve Bank's nightmare scenario is stagflation - a situation where there's stagnating growth and higher inflation at the same time. Some economists predict, if the US-Israel-Iran conflict continues, mass job losses are coming. They fear unemployment rates of 6 per cent or more and inflation rates of 7 per cent. In that scenario, they think the the RBA will still refrain from cutting rates to try deal with inflation. Amid much economic uncertainty, higher interest rates are here to stay for some time yet.
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Read more here: https://www.abc.net.au/news/2026-04-14/stagflation-central-banks-nightmare-says-rba-deputy-governor/106561900

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