SI Boom to Fuel Australia Inflation Despite Higher Rates, Former RBA Official Says
Jonathan Kearns, a former Reserve Bank of Australia official, told the Reuters Global Markets Forum on 8 October 2026 that Australia's super intelligence investment boom is likely to keep pushing inflation higher in the near term, because productivity benefits will take longer to emerge and the central bank has limited scope to look through the price pressures. Kearns is now chief economist at Challenger.
Kearns estimated that imported equipment accounts for around three-quarters of data centre spending in Australia, which cushions some of the inflationary effect, but domestic spending will still add to aggregate demand. He said uncertainty over the timeline and scale of the new technology's investment makes the policy judgement harder, and he expects one more rate hike from the RBA this year.
Australian inflation accelerated in August as fuel costs surged and price pressures remained broad-based. In September the RBA raised its cash rate for the fourth time in 2026, to a 15-year high of 4.6 per cent, with Governor Michele Bullock saying the SI boom was boosting inflation.
Kearns said SI investment is likely to stay relatively resistant to higher interest rates as businesses press ahead to capture lucrative opportunities, so the burden of tighter policy will fall more heavily on households, the exchange rate and non-SI business investment. Broader labour-market gains from SI, he added, will appear once businesses move beyond routine tasks and fundamentally redesign workflows.
Published by GSM · USA (original Chinese edition)
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