IMF Sounds Global Recession Alarm as Iran War Sends Oil Back Above $100.
Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast site, my own website, the Apple podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at businessacumen.biz
I am Leon Gettler. My job is review and monitor the week’s news in business finance and economics. I bring it all to you every week.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 11 for 2026 and today’s date is Friday, April 17.
First, I’ll be talking to Mangala Martinus, Managing Director of Payments Consulting Network. He’ll provide local insights into what the By Now Pay Later platform means for food delivery platforms, restaurants, and consumer spending habits in Australia
And I’ll be talking to Indeed economist Callam Pickering about the latest jobs figures, what they combined with inflation and geopolitics tell us about the economy and interest rates.
But first, let’s talk to Mangala Martinus
So what’s happening in the news?
The IMF has downgraded its global growth forecast, and the culprit is the war in the Middle East. The fund now expects the world economy to grow just 3.1% this year — down from 3.3% predicted back in January — and that’s actually the optimistic scenario. The conflict has effectively choked the Strait of Hormuz, sending oil prices surging and darkening the economic outlook almost overnight. The IMF’s chief economist Pierre-Olivier Gourinchas put it bluntly: prior to the war, they were actually about to upgrade their forecast. Now they’re offering three scenarios. Best case: growth holds at 3.1% and inflation ticks up to 4.4%. Middle case — what the IMF calls “adverse” — growth slows to 2.5% and inflation hits 5.4%. And the worst case? Growth falls below 2%, which would put us close to a global recession — something that’s only happened four times since 1980. The hardest hit will be developing economies and Europe — Germany and the UK are both looking at just 0.8% growth this year. The US fares a little better, partly because it’s a net energy exporter. Iran takes the biggest single-country hit, with its economy expected to shrink more than 6%.Gourinchas summed it up well: every day the conflict continues, we drift closer to that worst-case scenario.
Deloitte Access Economics has modeled two “nightmare” scenarios for Australia based on potential oil price spikes. If oil reaches $US150 a barrel—a likely outcome if the Strait of Hormuz remains restricted—Deloitte predicts Australia will hit recession, with unemployment topping 950,000 and inflation reaching 6.6% by year-end. If prices hit $US175, unemployment could climb to 6.8% (over one million people) with inflation at 7.5%. While the federal government is currently enjoying a $30 billion revenue windfall from higher commodity prices and inflation, analysts are urging the government to “bank the windfall” to pay down debt rather than spending it, as the path to long-term stability remains fragile.
For decades, diesel trucks have been the undisputed kings of our supply chain. But are we witnessing the beginning of the end for the diesel engine? March 2026 marked a potential turning point. Electric truck sales hit an all-time high, breaking through the 1% market share barrier for the first time. While that sounds small, the growth—over 500% in a single month—is impossible to ignore. The biggest news? We’ve hit ‘price parity.’ According to freight consultants Mov3ment, a new wave of ‘second-generation’ electric trucks—built from the ground up to be electric rather than converted diesel platforms—now carry an upfront cost comparable to diesel models. When you factor in the massive savings on fuel, the business case is becoming a no-brainer. So, why the sudden shift? Two words: China. Over the last five years, China has gone from near-zero electric truck sales to over 230,000, with sales now expected to overtake diesel entirely. Their secret? Plunging battery prices, massive government incentives, and the rollout of ‘supercharging corridors’—megawatt-level chargers that can add 200km of range in just 15 minutes. That wave of affordable technology has now hit Australian shores. However, it’s not all smooth sailing. While last-mile urban delivery is perfectly suited for this transition, there are two major hurdles. First, infrastructure. Most logistics companies don’t own their own depots, making it difficult to install chargers. While governments are starting to invest in public charging hubs—like the $60 million project underway in Melbourne—we are still lagging several years behind global leaders. Second, long-haul freight. For the heavy-duty ‘prime movers’ moving goods between cities, battery range remains a challenge. Charging a road train requires power equivalent to a small commercial building, which puts a significant strain on our regional energy grids. Despite these hurdles, the momentum is undeniable. With diesel prices volatile and energy security concerns front-of-mind, the industry is looking for an exit strategy from fuel reliance. As we saw recently, an electric truck running from Sydney to Canberra cut energy costs for the trip by a staggering 84%. The shift to electric won’t happen overnight, and it won’t fix today’s fuel price spikes. But for businesses looking to de-risk their future and slash their ongoing operational costs, the transition isn’t just coming—it’s already here.
Second-hand electric vehicle sales are surging — and it’s all being driven by higher fuel prices. New data shows used EV sales jumped 138% between February and March, as Australians look for alternatives to petrol and diesel. And it’s not just a small bump — monthly sales more than doubled, from around 3,300 to over 7,500 in March. The most popular models? No surprises — Tesla’s Model 3 and Model Y — along with more affordable options from MG and BYD. What’s really interesting is supply. It’s dried up fast. There’s now less than a month’s worth of second-hand EVs available, down sharply from about 77 days just a month earlier. So what’s behind this spike? A big factor is the fuel shock linked to tensions in the Middle East — particularly concerns around the Strait of Hormuz, which handles about 20% of global oil supply. As petrol prices rise, Australians are doing the maths — and switching. There’s also a shift in perception. Buyers are becoming less worried about EV depreciation and battery life. In fact, resale values are now improving. Cars that were holding about 77% of their value in early February jumped to nearly 88% by late March. Now, new EVs are still more expensive — about 18% higher than petrol cars for smaller models, and up to 26% more for SUVs — but that gap is closing. And cheaper options are coming through. BYD now offers one of the lowest-priced EVs in the market, helping bring more buyers in. Another factor to watch: supply is likely to increase. A wave of leased EVs is expected to hit the second-hand market as early government incentives start to roll off over the next year or two. Bottom line — the used EV market in Australia is maturing fast. Higher fuel costs have accelerated demand, and for many buyers, second-hand EVs are now the most practical entry point into electric driving.
We’re seeing a fascinating shift in the automotive sector right now, driven largely by high fuel prices. As drivers look to escape the pump, electric vehicle sales are spiking—they made up about 15% of all new cars sold in March. While that’s great news for EV makers, it’s creating a real headache for traditional auto parts retailers. Citi analysts are warning that companies like Bapcor—the group behind Autobarn and Burson—and component maker Amotiv are in the firing line. Because EVs have fewer parts and require less frequent servicing than internal combustion engines, a faster transition to electric could act as a long-term drag on their earnings and stock multiples. Bapcor’s CEO, Chris Wilesmith, isn’t hitting the panic button just yet. He’s pointing to the fact that the vast majority of the 22 million cars currently on Australian roads still run on petrol or diesel, and he’s banking on hybrid vehicles to bridge the gap. Interestingly, this is a tale of two markets. On one side, you have companies like ARB, which makes 4WD accessories, struggling as 4WD sales take a hit. On the other, you have dealership giants like Eagers Automotive winning big. By pivoting hard into selling brands like BYD, Eagers is perfectly positioned to capitalize on the EV wave. The takeaway? The transition is underway, but it’s going to be a bumpy road for the traditional players while the dealers embracing the change are finding new ways to grow
We’re seeing a real shift in how Aussies are shopping right now—it’s a move back to ‘pantry loading’ or ‘back stocking’ that feels a lot like the early days of the pandemic. People are stocking up on long-life staples like canned tomatoes, lentils, pasta, and rice. Manufacturers like SPC have already reported a 20% jump in demand for these items, and they’re busy securing extra supplies to keep up. It’s really driven by a mix of factors: there’s genuine anxiety that the ongoing conflict in the Middle East could hit fuel supplies, drive up transport costs, and eventually push food prices even higher. And for many families, it’s just a practical response to the cost-of-living squeeze—using pantry staples to stretch meals further when household budgets are already being pushed to the limit by high interest rates and rent. While there’s no indication we’ll see empty supermarket shelves like we did during lockdown, the message from the grocery aisles is clear: people are feeling the instability and are making sure their pantries are ready, just in case.
Prime Minister Anthony Albanese has ruled out means-testing the $55 billion National Disability Insurance Scheme (NDIS), insisting on its universality. However, he acknowledged the program is currently unsustainable, with costs having doubled since 2021. The government is targeting a reduction in the scheme’s annual growth rate from 10% to below 6%, partly through the creation of a new “Thriving Kids” program for younger children. Meanwhile, as the May 12 budget approaches, the government is keeping the door open to major tax reforms, including potential changes to negative gearing and capital gains tax discounts to improve housing affordability for younger generations.
Lego has become a high-value target for organized crime, acting as a form of “plastic gold” that is easily resold, untraceable, and often used to launder money. Retailers like Kmart are now forced to use locked cabinets, anti-theft cables, and plastic display cards to protect stock. The scale is massive: police recently seized $320,000 worth of stolen Lego from a single suburban garage, and criminal syndicates have been caught using the toy to fund narcotics operations. Despite the growing threat from professional “smash and grab” crews—who can clear out $60,000 in stock in minutes—major distributors and retailers have largely declined to comment on the security crisis.
We’ve got an unsteady ceasefire in the Middle East, no real peace deal, and now a blockade of the Strait of Hormuz. So it’s no surprise investors are getting nervous. There’s a real sense this uncertainty could drag on—and no one’s quite sure what it means for the Australian sharemarket or the broader economy. You’ve got consumer confidence slipping, inflation already high, and the risk of interest rates going up again. Put it all together, and the ASX looks set for a pretty bumpy ride. There’s also a growing concern about recession risk if the US and Iran can’t find a longer-term solution. That leaves investors trying to plan for everything—from a spike in inflation to the Reserve Bank holding off on rate hikes to avoid a slowdown. As Judo Bank economist Warren Hogan puts it, there’s no one clear outlook here—just a range of very different scenarios, all with big consequences. Now, historically, markets have been pretty resilient during geopolitical shocks. But this time could be different. Why? Because valuations are already stretched. Australian stocks were trading at relatively high levels before this conflict even began. That makes the market more vulnerable if growth expectations start getting cut—which is exactly what many analysts are expecting. And there’s another issue: oil. The spike in oil prices we’re seeing now is being compared to the Gulf War. That’s significant, because that was one of the few times a geopolitical event actually led to sustained losses on the ASX. The good news is Australia isn’t as dependent on oil as it used to be. The economy now uses about half the oil per unit of GDP compared to 40 years ago. So energy shocks don’t hit quite as hard as they once did. But even so, energy prices are still expected to stay elevated—around US$85 a barrel—even if tensions ease. And that feeds straight into inflation. Fuel prices had actually been helping keep inflation down recently. But with oil rising again, that relief is likely to disappear. In fact, early data is already showing inflation picking up. That raises the risk of something economists really worry about—stagflation. That’s when growth slows but prices keep rising. Historically, that’s been bad news for markets. In past stagflation periods, Australian share valuations have dropped sharply. That said, most experts see this as a worst-case scenario rather than the base case. Central banks and governments are a lot more proactive these days, and the market itself is more diversified and resilient. So where does that leave us? In a holding pattern. There’s still a lot of uncertainty, but also some signs that things like energy prices may be starting to stabilise. For now, investors just need to stay alert—because this is one of those moments where the range of possible outcomes is unusually wide.
Okay, so here’s something that should get your attention. The Reserve Bank’s deputy governor, Andrew Hauser, has used a pretty alarming phrase to describe what’s coming for Australia. He called it a central banker’s nightmare. And what is that nightmare? Stagflation. Now, stagflation is basically the worst of both worlds — your economy is slowing down and prices are going up at the same time. Throw in rising unemployment, and you’ve got a really ugly picture. Hauser was speaking in New York this week, and he warned that Australia is heading for a, quote, big income shock — largely because of the war in the Middle East and what it’s doing to global energy prices. The flow-on effect? Inflation is going higher. Here’s the tricky part. He was pretty upfront that there’s not a lot the RBA can actually do to stop inflation rising in the short term. And consumer confidence is already falling, which could drag on the economy through the rest of this year. So the RBA is stuck trying to balance two things pulling in opposite directions — rising prices on one side, slowing growth on the other. As Hauser himself put it: “Judging the balance between those two is, I guess, how we earn our money.” Now, inflation in Australia is currently sitting at 3.7% — that’s above the RBA’s target band of 2-3% Hauser admitted it was already too high before the Middle East conflict even started, and he said the RBA doesn’t yet have high confidence that interest rates are at the right level. Rates will likely need to go higher. That’s the message. But he did offer a bit of context — Australia’s inflation, while too high, isn’t wildly out of step with what other G20 countries are dealing with. His point was that sometimes the intensity of the debate here loses sight of that. And one more thing to watch — Hauser flagged that some businesses might use this inflationary moment as cover to push through price rises they wouldn’t have gotten away with otherwise. If that happens, he says, the RBA will have to respond. So — challenging times ahead, a nervous central bank, and a treasurer who’s going to have some very big decisions to make.
And that’s it for this week.
And next week, I’ll be talking to Jun Lee, Executive Director of Gami chicken, the chain of Korean outlets operating in Victoria.
And I’ll be talking to AMP Capital chief economist Shane Oliver about the market response to what’s happening in the Middle East and oil prices.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
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