Oil crisis threatens Australian inflation surge as Treasury warns of potential one percentage point spike.

Oil crisis threatens Australian inflation surge as Treasury warns of potential one percentage point spike. If crude averages $120 per barrel for three months with delayed unwinding, headline inflation could jump significantly, impacting economic growth. Current prices sit around $90 per barrel following Middle East escalation, well above pre-crisis levels of $70. Treasury analysis shows a $100 barrel scenario would temporarily boost inflation by 0.5 percentage points and reduce GDP by 0.1 percent. The worse case scenario projects full percentage point inflation increase and 0.3 percent GDP decline. Markets anticipate the Reserve Bank will raise interest rates Tuesday as policymakers balance inflation concerns against economic uncertainty from geopolitical tensions.