Budget 2026: ‘Stagflation’ fears hang over the most consequential budget in decades

2 hours ago The News Room

With the war in the Middle East shocking global energy markets, the Reserve Bank governor says Australia is “staring down the barrel” of a very rough time, as economic growth slows, inflation rises, and unemployment slowly picks up.

It’s a trio of conditions that some economists warn could see a return of “stagflation”, a policy nightmare not seen in Australia since the 1970s.

The challenge for Treasurer Jim Chalmers on 12 May is how to deliver cost of living relief, without fuelling an inflationary crisis that could push the economy over the edge.

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