Davos 2023: Corporate leaders around the world are far from optimistic about the global economy this year. From record optimism, the sentiment has touched record pessimism, according to PwC’s 26th Annual Global CEO Survey.
Speaking to Business Today TV at the World Economic Forum (WEF) in Davos, PwC Global Chairman Bob Moritz shares, “73 per cent of CEOs are pessimistic about the global economy and its ability to grow. It is a record level of pessimism, and the last time we had seen this was during the 2008 financial crisis.”
It’s not a surprise, though, this pessimism, “given the high inflation, and the interest rates, and the volatility and uncertainty in the marketplace", Moritz said. “The pessimism is fairly consistent around the world and across sectors.”
The only difference between the post-Lehman collapse world in 2008-09 and now is that no one saw that shock coming. But as for the ongoing uncertainty, it was slowly building up, with Covid, then the war in Europe, high energy prices, and so on. “It was a boiling pot, given the magnitude and the complication of these issues,” Moritz states.
PwC, which surveyed over 4,400 global CEOs found that 40 per cent of them believe their organizations won’t survive in 10 years unless they transform now. This number is way higher at 70 per cent in countries like China and Japan, Moritz reveals. “ In China, they know they will have to pay top dollar to attract energy as they move away from coal. And that will have significant implications on business, and margins,” he says, adding “In Brazil, though, the pessimism is at a record low of 20 per cent.”
Where does India feature in the global scheme of things in 2023?
Moritz says, “In India, the sentiment will depend on how consumers consume products and services, and how technology implicates the way in which businesses manage themselves.”
He further elaborates, “Indian CEOs are equally pessimistic about the global economy, but much more optimistic about the local economy, and their ability to raise revenues. This [global macro] is a big opportunity for India - it continues to be an asset and a deployment for human capital to the world.”
The PwC Chairman also reckons that the world’s China+1 policy is going to significantly benefit economies like India, Indonesia, Vietnam, and other parts of Southeast Asia. “If India can also play in the green supply chain, that will be a huge benefit for the world,” Moritz states.
He also commended Indian CEOs for doing “a great job” in the last couple of years by moving with speed and scaling up their operations. Mortiz believes the world will need more “humble heroes” or “leaders that are strategic, can go really deep and operationalise, yet has less ego and is willing to listen and engage with all stakeholders”.
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