End of war ‘can’t come soon enough’, treasurer says, as inflation expected to rise above 5% in Australia with global supply chains buffeted

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The treasurer, Jim Chalmers, says inflation and unemployment are expected to rise because of Donald Trump’s war in Iran, warning ahead of next month’s federal budget that the economic fallout from the conflict could still become “severe”.

Playing down expectations of major revenue increases from soaring commodity prices, Chalmers said some forecasters had not adequately assessed the negative effects on Australia from slower growth and rising joblessness.

After talks with international counterparts in Washington DC last week, Chalmers conceded the closure of the strait of Hormuz was driving frustration and uncertainty.

“From an economic point of view, the end of the war can’t come soon enough,” he said as ministers gathered in Canberra for cabinet meetings on Monday.

“But even if and when the ceasefire sticks, even when the war ends, even when the strait is properly reopened, we don’t expect things to go back to normal straight away.

“The consequences of this war in the Middle East are already serious, and there is still a risk that they become severe.”

Chalmers confirmed planned cuts to the NDIS will be “easily the most important part of the savings package that we will present on budget night”.