RBA Identifies AI Boom as Risk to Higher Inflation
The Reserve Bank of Australia (RBA) has identified an unexpectedly strong global boom linked to artificial intelligence as one of the risks to higher and more persistent inflation. Deputy Governor Andrew Hauser cited this risk, along with the crisis in the Middle East and the weak supply capacity of the Australian economy.
According to Chief Economist Sarah Hunter, data centres are driving construction costs up due to high demand for workers at higher wages. This trend is part of a larger picture: business investment has increased by 12.6% of GDP over the past nine to twelve months, with a significant portion attributed to data centres and AI infrastructure.
RBA survey results show that two-thirds of respondents consider inflation one of their top three economic concerns, while only 25% believe higher interest rates reduce inflation.