SYDNEY - The potential for protectionist policies to win out in U.S. and European Union elections this year is a risk for business and is being closely watched by global financial conglomerate Macquarie Group , its CEO Shemara Wikramanayake said on Tuesday.

"The outcomes there could impact what we're seeing in the world, whether people are focused on multilateral relationships and trade or more inwardly focused," she said at the Macquarie Australia Conference in Sydney.

"That's going to impact to some extent a lot of the businesses we're looking at."

Over two dozen countries - home to more than half the world's population - are voting this year. India is part way through its mammoth multi-month vote while South Korea, Bangladesh and Indonesia have finished their elections.

Wikramanayake said it was likely incumbent Indian Prime Minister Narendra Modi would win re-election but European Parliament elections next month and U.S. elections in November were still up in the air.

Polls predict radical right parties will gain across the EU, including France, Germany and Italy where many seats are at stake, as voters rattled by a cost-of-living and energy crisis, illegal migration and a changing geo-political landscape seek alternatives beyond mainstream parties.

DEAL VOLUME PICKING UP

Wikramanayake also said the number of mergers and acquisitions had begun to pick up after a lengthy dry spell, in part thanks to greater confidence about the path of interest rates.

"It feels like the period where people sat back out of the markets and were cautious is starting to end," she said.

(Reporting by Lewis Jackson; Editing by Christopher Cushing)