The Reserve Bank of Australia has published a summary of discussions between the Monetary Policy Board and the first rotating panel of 11 external economists convened to provide external views on current conditions, the outlook and longer-run monetary policy issues. The release makes clear that Board members did not discuss their own policy views and that the meeting was not part of the Board’s regular monetary policy deliberations. The main themes were the effect of the energy price shock on activity and inflation, other risks that could materially affect the outlook over the next six to 24 months, and the medium-term effects of artificial intelligence on the Australian economy. On energy, participants focused on uncertainty around oil transit through the Strait of Hormuz, distinguishing between scenarios where markets continue to clear at higher prices and those where physical supply constraints begin to bind. They noted that household demand and most business activity had so far appeared reasonably resilient, helped in part by prior real income growth and government measures, although fuel-intensive sectors showed more weakness and higher energy costs were reported to be feeding through quickly and broadly into prices, especially in construction. On the broader outlook, participants discussed a softening housing sector, uncertainty over established versus new housing demand, possible labour market underutilisation, and risks from persistent inflation pressures, weak productivity, geopolitics, a sharp correction in global financial prices and rising income dispersion. On AI, the group broadly agreed that adoption in Australia remains at an early stage, that there is little evidence yet of higher total factor productivity and that experimentation could initially weigh on productivity, but that longer-term gains are likely as firms move to targeted use cases and new entrants displace less innovative businesses. They also noted that AI has not yet produced large job losses and could add to inflation in the short to medium term because of the infrastructure needed to support it.
Reserve Bank of Australia2026-06-03
Reserve Bank of Australia publishes first Monetary Policy Board advisory group summary on energy shock inflation risks and AI
The Reserve Bank of Australia published a summary of discussions between its Monetary Policy Board and a rotating panel of 11 external economists on current conditions, the outlook and longer-run monetary policy issues, clarifying that the meeting was separate from the Board’s regular policy deliberations. Participants focused on the impact of the energy price shock, broader risks to the outlook including housing, labour market underutilisation, persistent inflation and geopolitics, and the medium-term effects of artificial intelligence on productivity and employment.