RBA’s Hunter sees limited AI productivity gains so far

A Reserve Bank of Australia official said on Monday that artificial intelligence has not yet shown clear signs of lifting productivity or causing major job losses, while cautioning that the technology could create financial stability risks.

Assistant Governor Sarah Hunter spoke at a UBS conference in Sydney, noting that AI’s effect on inflation will likely shift over time. She said the technology is currently increasing demand and adding to price pressures while the economy faces supply constraints.

Hunter said evidence remains limited that AI has materially improved productivity or significantly affected employment levels.

"However, there are tentative signs of adjustment, through weaker job ad posting and employment outcomes in more AI-exposed occupations, and stronger growth in areas where the technology has had less of an impact, particularly for younger workers," she said.

The official warned that AI could increase financial stability risks, with asset prices vulnerable to sharp repricing if returns from AI investments fail to meet expectations.

Hunter said supply will eventually match demand as data centre capacity and related sectors expand, reducing current bottlenecks.

"If AI delivers broader productivity gains, economies will be able to produce more with the same inputs. As a result, the initial inflationary pressures from AI investment are likely to dissipate," she said.

Domestic data centre investment has contributed to demand pressures in the Australian economy. The Reserve Bank of Australia has raised interest rates five times this year to 4.85%, an 18-year high, to combat inflation.