Reserve Bank of Australia governor Michele Bullock said AI could be a bubble and is so far adding to inflation rather than boosting economic growth, even as the Albanese government pitches the technology as a fix for Australia's economic problems.
Key facts
- RBA governor Michele Bullock said AI could be a bubble.
- Bullock said there is no evidence AI is making the Australian economy more efficient.
- She said AI adoption is so far adding to inflation rather than economic growth.
- Bullock made the comments ahead of an expected interest rate rise next week, the Guardian reported.
- She described the slump in house prices as deeper than others in Australia's recent history.
Reserve Bank of Australia governor Michele Bullock has cast doubt on claims that artificial intelligence will rescue the country’s economy, saying the technology could be a bubble and that there is no evidence it is yet making the economy more efficient, according to the Guardian.
Her comments come as the Albanese government promotes AI as a solution to what it describes as Australia’s economic malaise. Bullock characterised the technology as a “great white hope” but said its adoption is so far adding to inflation rather than driving economic growth.
The governor’s remarks were made ahead of an expected interest rate rise next week, the Guardian reported, underlining the economic backdrop facing policymakers and households.
Bullock also addressed the housing market, saying the slump in house prices was deeper than others in Australia’s recent history.
The comments place the central bank’s assessment at odds with the government’s more optimistic framing of AI’s economic potential.
Why it matters
AI has been widely promoted as a driver of future economic growth, so scepticism from a central bank governor carries weight for markets, businesses and policymakers. If the technology is adding to inflation rather than productivity, it complicates the case that AI will quickly solve economic problems.
Frequently asked questions
What did Michele Bullock say about AI?
The RBA governor said AI could be a bubble and that there is no evidence it is making the Australian economy more efficient, noting that its adoption is so far adding to inflation rather than economic growth.
Is an interest rate change expected?
According to the Guardian, Bullock's comments were made ahead of an expected interest rate rise next week.
What did Bullock say about house prices?
She said the slump in house prices was deeper than others in Australia's recent history.