Australia's A$155B AI Data Center Boom Forces RBA to Keep Interest Rates High

Bloomberg Economics warns that AI data center capital expenditure could surpass 2% of Australia's GDP by the 2026-2027 fiscal year. The construction pipeline spans A$111B to A$155B over the next decade, heavily concentrated in New South Wales and Victoria. The Reserve Bank of Australia is holding its cash rate at 4.35% longer than standard economic models predict to offset inflationary pressures from the buildout. The Australian Energy Market Operator projects data center electricity demand could triple by 2030, threatening a 26% increase in electricity prices without substantial renewable energy investments. RBA chief economist Sarah Hunter notes the infrastructure surge is competing directly with the national housing market for finite construction labor and resources.