Economists are questioning Treasury's 'worst case' economic forecast from the Iran war.

It predicts a worst case scenario of inflation hitting 3.7 percent this year - if the conflict persists.

Independent economist Cameron Bagrie says he doesn't think Treasury has properly taken into account businesses feeling the second-hand impact of rising fuel prices.

"If they've got a reason to push up prices under the guise of what's going on in Hormuz around the globe, firms are going to use that excuse and try to jam in some price rises. We've seen it before."

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