RBA Models 2.5% Consumption Drop if AI Stock Bubble Bursts

Key Facts

1RBA papers show a 20% slump in AI stocks could cut Australian consumer spending by approximately 2.5% if losses spread.

2Australian households hold about 5.5% of their financial wealth in AI stocks, primarily through superannuation and overseas holdings.

3RBA models estimate the NAIRU at around 5%, suggesting the labor market remains tighter than previously assumed.

Internal Reserve Bank of Australia (RBA) documents reveal that a 20% slump in AI stock prices could cut consumer spending by approximately 2.5% if equity losses spread. According to investinglive.com, Australian households hold about 5.5% of their financial wealth in AI-related stocks, with 90% of that exposure tied to overseas companies primarily through superannuation funds.

The modeling emerges as the RBA maintains its cash rate at a 15-year high of 4.6%, with annual inflation reaching 4% as of September 30, 2026. Bank estimates also place the NAIRU at approximately 5%, higher than the current 4.6% unemployment rate, suggesting the labor market remains tighter than previously assumed despite the potential drag of A$40 billion to A$50 billion on spending into early 2027.