Key facts
- Hunter said there was limited evidence AI has materially lifted productivity, and that AI has had large effects on employment.
- Hunter cited tentative signs of adjustment: weaker job ad posting and employment outcomes in more AI-exposed occupations.
- Hunter said AI investment is initially adding to demand and price pressures while the economy is supply constrained.
- Hunter said supply would catch up with demand as data centre capacity and related sectors expand, easing bottlenecks.
- Hunter warned AI could raise financial stability risks if investment returns fall short of expectations.
Reserve Bank of Australia Assistant Governor Sarah Hunter said on November 9 that there was limited evidence artificial intelligence had meaningfully lifted productivity or caused widespread job losses, while warning the technology could pose growing risks to financial stability. She spoke at a UBS conference in Sydney, in remarks reported by Reuters.
Hunter said the effect of AI on inflation would likely vary over time, initially boosting demand and adding to price pressures while the economy was supply constrained. "Over time, supply will catch up with demand as data centre capacity and related sectors expand, easing current bottlenecks," she said. She added that if AI delivers broader productivity gains, economies will be able to produce more with the same inputs, and the initial inflationary pressures from AI investment are likely to dissipate.
A boom in domestic data centre investment has added to demand pressures in the economy and is one reason the Reserve Bank of Australia has raised interest rates five times in 2026, taking them to an 18-year high of 4.85% to fight inflation, according to the report.
Hunter said there was limited evidence AI has materially lifted productivity and that AI has had large effects on employment. "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.
She also warned that AI could increase risks to financial stability, with asset prices exposed to sharp repricing or even disorderly adjustments if AI investment returns fall short of expectations.