Reserve Bank of Australia governor Michele Bullock warned that artificial intelligence could be a speculative bubble and said there is not yet evidence it is improving Australia’s productivity. Although the government views AI as a major source of future economic growth, Bullock said rapid adoption and investment in data centres were currently adding to inflation rather than increasing efficiency, while a collapse in technology stocks could damage economic activity.

Bullock cited research suggesting employees using AI produced the same output while working 1.5 fewer hours per week, with productivity potentially falling until businesses redesign their processes. The government’s long-term forecasts assume productivity growth of 1.2% annually, lifting inflation-adjusted economic activity per person from A$99,200 to A$157,300 by 2066; at 0.8% growth, it would reach only A$136,600. She also said immigration accounted for almost all economic growth over the past year, but increased pressure on housing, where prices had fallen 3.1% in three months and investor loan approvals had dropped sharply.