Reserve Bank of Australia: Artificial intelligence has not yet boosted productivity

Reserve Bank of Australia (RBA) Deputy Governor Sarah Hunter stated that there is limited evidence that artificial intelligence has yet meaningfully increased productivity or caused widespread job losses.

Speaking at a UBS conference in Sydney, Hunter noted that the impact of artificial intelligence on inflation will change over time. Expressing that AI investments could initially increase demand and raise price pressures at a time when the economy is capacity-constrained, Hunter projected that as data center capacity and related sectors expand, supply will catch up with demand and these pressures will ease over time.

Stating that the surge in data center investments in Australia has reinforced demand pressures, the RBA pointed to this situation as one of the reasons for raising interest rates five times this year to 4.85 percent, an 18-year high, as part of the fight against inflation.

Regarding the effects of artificial intelligence on employment, Hunter noted that there are some signs of adjustment. She drew attention to the fact that job postings and employment outcomes have weakened in occupations more exposed to artificial intelligence, while growth has been stronger in areas less affected by the technology, particularly for young workers.

Assessment: Hunter warned against financial stability risks, stating that if expected returns from artificial intelligence investments fail to materialize, asset prices could be sharply repriced or undergo disorderly adjustments.