By Lewis Jackson
SYDNEY, May 2 (Reuters) - Australia will have a milder
economic downturn than its peers, according to the head of
Macquarie Group , even as persistent inflation means
rates at home and elsewhere will likely need to rise higher.
Resurgent population growth, commodity wealth and access to
renewable energy will help shield Australia from the economic
drag of higher interest rates, Macquarie Group Chief Executive
Shemara Wikramanayake said on Tuesday.
"That is going to drive underlying growth here, which will
shield the economy from an extended downturn," Wikramanayake
said during an opening address at the Macquarie Australia
Conference in Sydney.
The remarks came hours ahead of a Reserve Bank of Australia
meeting where the central bank is expected to extend its pause
to a second month but caution further hikes will follow if
inflation stays high.
Persistent inflation in Australia and elsewhere will take
action to reign in, Wikramanayake said. Equities are likely to
face more pain ahead, she added.
The prospect of slower growth is likely to feature again
when bank earnings season kicks off later this week. Macquarie
will report on Friday followed by Australia's "big four" banking
giants next week.
Long a capital market stalwart, Macquarie has made a
concerted push into retail banking over several years and now
ranks as the No. 5 mortgage lender in the country.
Analysts expect the "big four" to post strong earnings
again, but signal a bumpy second half, and 2024, as credit
growth slows and bad debt rises.
Wikramanayake's remarks also took in the impact of
artificial intelligence models such as ChatGPT.
"There's a fear that it's going to be the end of employment
and jobs but actually employment rocketed as part of the
industrial revolution," she said, noting the bank had hired
around 2,000 people over the past year.
(Reporting by Lewis Jackson; Editing by Lincoln Feast.)
@lewjackk))
