Macquarie Group chief executive Shemara Wikramanayake says the economy should remain resilient despite the threat of rising interest rates and inflation, saying the trends of decarbonisation and digitisation would drive strong business investment.

Wikramanayake on Tuesday said Australia had shown its economic strength during the COVID-19 pandemic and argued the country still had “scope for significant investment opportunities” this year, despite the prospect of rising interest rates.

Speaking before a highly anticipated Reserve Bank announcement on interest rates on Tuesday, Wikramanayake said global growth would remain “strong” in the short term, as she tipped economic growth of 4 per cent in Australia this year.

“Despite the difficulties of the past few years, the Australian economy has proven, as we all know, particularly resilient, with strong growth of about 4 per cent likely this year, and also the labour market is particularly tight,” she told investors at the Macquarie Australia Conference in Sydney.

“Having said that we are not immune from the global pressures that we are seeing, so while inflation has been slower to take off here in Australia than some regions, it’s become more broad-based and more deep-seated in the recent period, which is leading to a likely shift, as we all know, here in monetary policy in the weeks ahead.

Even as borrowing costs increased from record lows and the Ukraine war unleashed volatility in energy prices, Wikramanayake pointed to underlying strength in business investment.

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