Chalmers's warning on debt servicing costs puts the spotlight on the global rise in bond yields, which is now feeding directly into government budget arithmetic. That keeps fiscal supply and credit concerns on the radar for Australian government bonds ahead of the mid-year update. His focus on energy-driven inflation reinforces the case that oil is the main channel through which the Iran war reaches the Australian economy. Any prolonged disruption to Gulf supply keeps upward pressure on both prices and the RBA. The Japan visit, centred on fuel security, also highlights how energy-importing economies in Asia are coordinating their response to the oil shock.---Australia's treasurer says the Iran war is a disaster for the economy, with the bill arriving through petrol prices, interest rates and the cost of the nation's debt.Summary:Treasurer Jim Chalmers called the US-Iran war an economic disaster, blaming it for higher global inflation and interest rates.He said an end to the war can't come soon enough, while declining to advise President Trump.After the RBA lifted rates to a 15-year high, Chalmers said budget settings are not the main driver of prices.A savings package is due in the mid-year budget update, but rising bond yields will add billions to debt servicing costs.He does not expect a recession, but said the war is weighing on global growth. He is also travelling to Japan to meet Finance Minister Satsuki Katayama.Australian Treasurer Jim Chalmers has described the US war with Iran as an economic disaster, Bloomberg (gated) reported. He blamed the conflict for driving up inflation and borrowing costs around the world and warned that it is also dragging on global growth.Speaking on ABC television on Sunday, Chalmers said that whatever the reasons for the war, its economic impact had been disastrous for the cost of living in Australia and globally. He said the conflict was adding substantial upward pressure on inflation, which explained why interest rates were rising worldwide. Asked whether President Donald Trump should end the war, Chalmers declined to offer advice but said an end could not come soon enough. The longer it lasted, he warned, the greater the damage to the global and Australian economies.The treasurer was also pressed on whether government spending had contributed to above-target inflation. The Reserve Bank of Australia has lifted interest rates to a 15-year high, citing both conflict-driven energy costs and domestic capacity pressures. Chalmers said spending growth had slowed and that budget settings were not the main driver of prices.He flagged that a savings package would be included in the mid-year budget update, but cautioned that rising global bond yields would add billions of dollars to the cost of servicing public debt. He said pressure on budgets in Australia and elsewhere was intensifying, and it was unclear how the savings would net out against higher borrowing costs.Chalmers said he did not expect a recession in Australia but acknowledged the war was weighing on global growth and that the country was not immune.He also announced plans to travel to Japan to meet Finance Minister Satsuki Katayama, as well as business leaders and investors. He said the two countries faced similar pressures from higher energy prices and bond yields, and that the visit would focus on investment, fuel security and closer ties. This article was written by Eamonn Sheridan at investinglive.com.