BIS Warns AI Blurs Economic Signals for Policymakers

MT Newswires Live07-29

The artificial intelligence boom could make it significantly harder for central banks to gauge economic conditions and set interest rates, as the technology simultaneously boosts demand and supply, Reuters reported Tuesday, citing the Bank for International Settlements.

The BIS said AI "blurs cyclical signals," warning that debt-financed AI spending is already driving up activity, trade, and equity markets, while future productivity gains from AI remain uncertain in timing and scale, according to the report.

The BIS added that AI's economic impact will likely be uneven across countries, with major suppliers of semiconductors, computing infrastructure, or AI-related services positioned to see stronger growth, the report said.

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