Chalmers says Iran war will raise inflation and unemployment, warning fallout of conflict could be ‘severe’

‘Even when the strait [of Hormuz] is properly reopened, we don’t expect things to go back to normal straight away,’ Australian treasurer Jim Chalmers said on Monday. Photograph: Lukas Coch/AAP

The treasurer, Jim Chalmers, says inflation and unemployment are expected to rise because of Donald Trump’s war in Iran, warning ahead of next month’s federal budget that the economic fallout from the conflict could still become “severe”.

Playing down expectations of major revenue increases from soaring commodity prices, Chalmers said some forecasters had not adequately assessed the negative effects on Australia from slower growth and rising joblessness.