Tariff wars, geopolitical flare‑ups and market volatility “should have broken the global economy, but it didn’t,” according to Commonwealth Bank chief economist Luke Yeaman (pictured left). Instead, CBA’s latest CommBank View report says an AI‑fuelled investment boom has underpinned a surprisingly resilient 2025 and set up a cyclical upswing in 2026, led by the US.
Yeaman argues “the impact of AI should not be undersold, and we expect this to continue and accelerate in 2026”, with data centres, energy and enabling technologies driving a new wave of capital spending and early productivity gains, particularly in the US.
At the same time, global risks remain elevated. Geopolitics – especially US‑China tensions – continues to shape energy, commodity and financial markets, keeping risk premiums high. Bond yields have drifted up as investors adjust to heavier government borrowing and structurally higher neutral rates, rather than any fresh burst of global inflation.
Australia has entered 2026 in far better shape than previously feared, tracking CBA’s earlier “high road” scenario where demand pushes up against supply limits. Household incomes have lifted, consumer spending has firmed, business investment has picked up (notably in AI and energy infrastructure), and housing demand has re‑accelerated.
But that strength has brought inflation back into focus and forced the Reserve Bank to move again. In February, RBA lifted the cash rate to 3.85%, with CBA expecting a further increase in May as it re‑asserts its inflation‑fighting credentials.
“The RBA’s patience on inflation has run out,” said Belinda Allen (pictured center), CBA’s head of Australian economics. “There are now clear limits to how much above-target inflation the bank is prepared to tolerate.”
CBA expects higher interest rates to cool the economy through 2026, largely via household spending, even as national home prices are forecast to rise by around 5% this year, supported by income growth, population pressures, and tight supply.
Alongside its macro outlook, CBA has released an Australian‑first report explaining how it is using artificial intelligence across the bank, from fraud and scam prevention to frontline customer support.
“We’ve heard that stakeholders want to better understand how AI is being used across the bank and our approach to managing the risks associated with its adoption. This report outlines our progress and the safeguards we have in place to support responsible use,” said CBA CEO Matt Comyn (pictured right).
Executive general manager Alex Matthews said trust sits at the core of the bank’s AI strategy.
“As Australia’s largest bank, trust is fundamental to how we use AI. Our approach is focused on our risk management foundations and guided by our AI principles,” Matthews said.
CBA says it invested more than $900 million in FY2025 to help protect customers from fraud, scams, cyber threats, and financial crime. AI engines now scan more than 20 million payments a day on average and send over 40,000 proactive warning alerts to customers via the CommBank app, helping reduce customer fraud losses by more than 20% in the first half of FY26 compared with a year earlier.
CBA’s report outlines how machine learning has been embedded in its Customer Engagement Engine since 2015, enabling more tailored offers and tools such as Benefits finder, which has helped customers access hundreds of rebates and support payments since 2019. Newer tools like Compass AI, a generative AI solution for frontline staff, draw from a business banking knowledge base to answer queries about three times faster than traditional methods and have already handled more than 500,000 questions.
The bank also highlights its partnerships with government, universities and industry – from cyber‑intelligence firm Apate.ai to the Future Skills Organisation Skills Accelerator‑AI – as part of a push to build Australia’s broader AI capability and workforce skills.
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