RBA Governor Says War‑Driven Commodity Shock Leaves Australians Poorer, Projects 1.3% Growth in 2026

TL;DR: The Reserve Bank of Australia says the Iran war has pushed up oil, energy and commodity prices, making households poorer and limiting growth to 1.3% in 2026.

Context The Reserve Bank of Australia (RBA) announced a third interest‑rate rise this week, citing persistent inflation pressures. In the same press conference, Governor Michele Bullock warned that the war in Iran has sent global oil and energy prices soaring, directly affecting Australian consumers.

Key Facts Bullock told journalists that “Australians are poorer because of this shock to oil prices and energy prices and all the other commodity prices that are being impacted.” The RBA’s latest outlook projects gross domestic product (GDP) will expand by a modest 1.3% in 2026, roughly half the 2.6% growth recorded the year before. Despite the slowdown, the bank expects the unemployment rate to stay in the low‑four‑percent range through the end of the year, indicating a stable labour market.

What It Means Higher energy costs erode real wages, leaving households with less disposable income while price pressures remain elevated. The modest growth forecast suggests businesses will face weaker demand, limiting wage growth and investment. A steady unemployment rate means job security is unlikely to deteriorate, but the combination of stagnant wages and rising living costs could squeeze household budgets.

The RBA’s stance signals that further rate hikes are not ruled out; the board wants “space to see how the conflict plays out.” Analysts anticipate another increase at the June meeting if inflation remains above target. Meanwhile, the federal budget, due next week, will test the government’s willingness to provide fiscal relief without fueling demand, a balance the governor says is difficult to achieve.

Consumers should monitor upcoming inflation data and any policy shifts from the RBA and Treasury. The trajectory of the Iran conflict will remain a key driver of commodity prices, shaping Australia’s economic outlook through 2026.