Around 27% of the Indian CEOs believe that global economic growth will improve over the next 12 months, a sharp decline from 51% who had voted for an improvement in 2019.
Pessimism is in the air when it comes to improvement in economic growth, a CEO survey by PwC released on Tuesday at the World Economic Forum in Davos shows. Around 27% of the Indian CEOs believe that global economic growth will improve over the next 12 months, a sharp decline from 51% who had voted for an improvement in 2019.
Similar is the case when the CEOs were asked about the prospects of revenue growth of their respective organisations over the next 12 months. Around 40% of the Indian CEOs were “very confident” about their 12-month revenue prospects, again lower as compared to 55% in 2019.
Around 51% of Indian CEOs said they are “extremely concerned” with uncertain economic growth, which they ranked as the biggest threat. Speed of technological change and over-regulation and policy uncertainty have been ranked as other major threats by them.
“If one word were to sum up the global CEO sentiment today, it would be uncertainty. It has been decades since we have come across four strong levers affecting business strategy and outcome all at once, to the extent that we are witnessing today. It is hard to think of an organisation that is directly or indirectly not impacted by the factors of climate change, security in using technology, the increasing need to upskill their people and over-regulation. That said, this uncertainty provides a golden opportunity for organisations to make the right investments for the future,” Shyamal Mukherjee, chairman, PwC in India, said.
On the bright side, India’s position as a region that can drive a company’s growth over the next 12 months moved up, but just a notch. Around 9% of the global CEOs surveyed put their money on India as one of the top three territories they consider will drive their company’s growth in 2020, which is a percentage point higher than the number in the survey conducted in 2019. However, India, as last year, remains the fourth choice for CEOs after the US, China and Germany.
Another positive aspect in India’s favour was on government striking a balance between encouraging businesses and maintaining trust among consumers. “In this divisive environment, designing regulations that both maintain business competitiveness and bolster consumer trust is a delicate balancing act. And it is one that, to date, has achieved mixed results, at least in the area of data privacy. A clear majority of CEOs in China, Brazil and India believe that governments are successfully striking that balance,” the survey noted.
The PwC survey, which is in its 23rd year, revealed a heightened level of pessimism among global CEOs regarding economic growth across the globe. “For the first time, more than half of the CEOs we surveyed believe the rate of global GDP growth will decline. This caution has translated into CEOs’ low confidence in their own organisation’s outlook. Only 27% of CEOs are ‘very confident’ in their prospects for revenue growth in 2020, a low level not seen since 2009. This finding is compelling because the change in CEOs’ revenue confidence has proven to be a reliable indicator of both the direction and the level of global GDP growth in the year ahead, according to our analysis,” PwC said.