Source: AAP

An extra 17,900 jobs were added to the Australian economy in March, but forecasters predict the labour market to deteriorate as a result of the Iran war.

Australia’s unemployment rate has held steady at 4.3 per cent despite the Iran war raising fears of a global recession and mass job lay-offs.

The result was driven by an increase in employment of 17,900 in March, the Australian Bureau of Statistics reported on Thursday.

While economists had predicted the unemployment rate to hold steady, the rise in created jobs was below expectations for a rise in employment of 20,000.

The participation rate fell by 0.1 percentage points to 66.8 per cent, ABS head of labour statistics Sean Crick said.

The rise in new jobs was driven by a surge in full-time employment of 53,000, while part-time roles fell by 35,000.

The latest figures follow a surprise jump in unemployment from 4.1 to 4.3 per cent in February due to fewer unemployed people waiting to start a new job compared to the same period in previous years.

Ahead of the release, Westpac economist Ryan Wells said it was almost certainly too early for flow-on effects from the conflict or recent interest rate rises to be showing in the labour market.

Mr Wells expected the combination of softer demand for labour and slightly higher workforce participation would cause the unemployment rate to rise to five per cent by early 2027.

In a recent report, the International Monetary Fund said the war, if not resolved soon, could cause a global recession, although Australia would likely experience stronger economic growth than other advanced economies.

Meanwhile, Australia’s budget balance was predicted among the three strongest of the G20 nations, the IMF said in a separate report.

The budget balance as a share of GDP was ahead of countries such as the US, UK, Germany and Japan, while the nation had the fifth-lowest debt when weighed against economic output, the report said.

The findings coincide with Treasurer Jim Chalmers holding talks in Washington for the IMF-World Bank spring meetings, along with his counterparts from the UK, China and Japan.

The IMF has warned of a global recession if the situation in the Middle East does not abate.

Dr Chalmers said the ranking of the government’s finances was an outstanding result.

“We’re not immune from global volatility as a result of the conflict in the Middle East but thanks to the progress we’ve made in the budget, we’re well placed to confront it,” he said.