Macquarie Group chief executive Shemara Wikramanayake has delivered an upbeat view on the domestic economy despite Australia’s slow vaccine rollout, saying the nation’s recovery from the financial shock of COVID-19 is leading the world.
Ms Wikramanayake also underlined the opportunity from rapid technological changes, including on the “critical” challenge of climate change, where she called for a partnership between business and government.
In the latest optimistic commentary from a banking boss, Ms Wikramanayake said the world’s economic recovery was making good progress, and she tipped rapid growth over the rest of 2021.
“Despite the ongoing risks the Australian economic recovery continues to lead the world, with medical success allowing the government to re-open much of the economy”: Macquarie Group chief executive Shemara Wikramanayake Lisa Thompson.
“Following one of the largest economic shocks since the 1930s, the global economic recovery is now well underway, with GDP likely to expand by a rapid 5.5 per cent over the course of this year. In general the countries that have controlled the virus the best have seen the strongest recoveries, with China and Australia outperforming over last year,” Ms Wikramanayake said at the annual Macquarie Australia Conference.
“The US is likely to lead the way in 2021 as fiscal stimulus and the rapid vaccine rollout allow economic re-opening, but Australia is still expected to this year outperform most other economies.”
Speaking to institutional investors from around the region, Ms Wikramanayake highlighted Australia’s success in containing the virus, predicting a further opening-up of economic activity this year.
“Despite the ongoing risks the Australian economic recovery continues to lead the world, with medical success allowing the government to re-open much of the economy,” she said.
“While our vaccine rollout has started slowly, very low rates of COVID infection have allowed much of the economy to return toward normal. As the program picks up pace, the success of the mass inoculation programs in places like Israel suggests that we will be able to further normalise as the year progresses and eventually re-open our borders so that some of you can join us here next year in person,” she said, speaking via a webcast.
Despite Ms Wikramanayake’s optimism, she added there was a growing divergence in the health and economic outcomes being experienced in different nations, as many emerging countries suffered sharp rises in COVID-19 cases.
Macquarie is one of the world’s biggest players in infrastructure financing, including in renewable energy, and Ms Wikramanayake also welcomed the recent signs of increased global momentum towards cutting carbon emissions. She said businesses and the financial markets had a crucial role to play in the process.
“We can be confident that we know that the best approach to reaching the necessary targets is a strong partnership between the public and private sectors. Those of us in this virtual room hold many of the solutions to effect the vast scale of change that’s needed,” she said.
Macquarie will deliver its annual results on Friday, with markets expecting a profit of about $2.95 billion, close to its highest ever. The bank’s share price has doubled from its lows of last year, and was trading at $160.28 on Tuesday. National Australia Bank and ANZ Bank will also report their profits this week, with markets expecting a significant rise in dividends.
Ms Wikramanayake’s remarks on the economy highlight the optimism among senior bankers, after Westpac chief Peter King on Mondaysignalled the lender’s confidence by cutting bad debt provisions and sharply raising its dividend.
Ms Wikramanayake also highlighted the opportunities from disruption, saying the last year underscored how technology was transforming industries including health care, energy, and consumer services.
“It’s been eye-opening to witness how we can continue to get the job done and indeed make permanent shifts that lead to better outcomes,” she said.
Via The Sydney Morning Herald