Iran war is boosting inflation outlook for full year

Added: 2026-05-18

[00:00:00]The conflict in the Middle East boosting the outlook for inflation for the full year and raising concerns about profit margins, but so far having an only modest impact on the overall growth forecast. The NAB industry outlook three-month expectations in the survey shows that a net negative 18% see rising profit margins over the next three months. Positive 42% are charging more and that's the most since 2022.

[00:00:28]Net positive 63% see their material cost riding rising and only 12% on net see their capex increase. That's the lowest since May of 2025. Gregory Daco, he's the NAB president, he comments nearly half of respondents report a negative business impact from the Iran conflict with nearly one quarter reporting plans to scale back investment and hiring over the next six months.

[00:00:54]Still, despite an outlook for higher inflation, overall growth, while taking a hit, expect it to soldier on around 2% according to the latest blue-chip economic indicators.