AI Productivity Growth Could Lift Australia’s Economic Speed Limit

For years, Australia’s economic debate has revolved around one stubborn constraint: productivity.

Without stronger productivity growth, the economy struggles to expand without generating inflation. The Reserve Bank has repeatedly warned that Australia’s long-term growth speed may sit closer to 2 per cent a year because output per worker has stagnated since the pandemic.

New data suggests the picture may be shifting, although cautiously.

Productivity, measured as gross domestic product per hour worked, rose 1 per cent over the year to December, according to the Australian Bureau of Statistics. It marks the first meaningful improvement in the post. . .