‘73% of global CEOs expect economic growth decline this year’, recession casts shadow on WEF summit

Davos: Casting a gloomy shadow over the first day of the World Economic Forum Annual Meeting here, a global survey of CEOs on Monday showed that 73 per cent of them expecting the global economic growth to decline over the next 12 months.

Releasing the annual survey, PwC said this is a significant departure from the optimistic outlook of 2021 and 2022 when more than two thirds thought economic growth would improve.

This is the most pessimistic CEOs have been regarding global economic growth since PwC began asking this question 12 years ago.

‘Recession likely’

Two-thirds of private and public sector chief economists surveyed by the WEF expect a global recession this year, with some 18 per cent considering it “extremely likely” – more than twice as many as in the previous survey conducted in September 2022.

“The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for the investments needed to get back to growth and raise living standards for the world’s most vulnerable,” WEF Managing Director Saadia Zahidi said in a statement accompanying the survey results.

The WEF’s survey was based on 22 responses from a group of senior economists drawn from international agencies including the International Monetary Fund, investment banks, multinationals and reinsurance groups.

On inflation, the WEF survey saw large regional variations: the proportion expecting high inflation in 2023 ranged from just 5 per cent for China to 57 per cent for Europe, where the impact of last year’s rise in energy prices has spread to the wider economy.

A majority of the economists see further monetary policy tightening in Europe and the United States (59 per cent and 55 per cent, respectively), with policy-makers caught between the risks of tightening too much or too little.

The survey further showed that nearly 40 per cent of CEOs do not believe their organisations would be economically viable in 10 years if they do not transform.

Inflation, macroeconomic volatility and geopolitical conflict ranked as the top global threats while cyber and health risks fell from a year ago.

The PwC survey also showed that companies are cutting costs but do not plan yet to reduce headcount or salaries in their fight to retain talent following the ‘great resignation’.

Leaders in France, Germany and the UK were found to be less optimistic about domestic growth than the global growth compared to those in the US, Brazil, India and China.

The 26th annual survey was conducted among 4,410 CEOs from 105 countries and territories, including 68 CEOs from India, between October and November 2022.

WEF annual meet starts in Davos

The World Economic Forum Annual Meeting began on Monday and thousands of people, including around a hundred participants from India, will discuss ‘cooperation in a fragmented world’ this week in this snow-laden Swiss ski resort town.

The meeting started off with the crystal awards ceremony and the awards celebrate the achievements of leading artists who are bridge-builders and role models for all leaders of society.

Artist Maya Lin, acclaimed soprano Renee Fleming and actors Idris Elba and Sabrina Dhowre Elba have been presented the awards.

The awards ceremony was followed by ‘I Sea You’ musical concert, which was presented as a powerful cultural message of unity and collaboration.

It also made a call to action to world leaders and policy makers to implement the appropriate and required agreements to protect and preserve the coral reefs of the Northern Red Sea.

More than 50 heads of governments or states are expected over the next five days for the meeting beginning Monday, while four Union ministers — Mansukh Mandaviya, Ashwini Vaishnaw, Smriti Irani and R K Singh — as also Maharashtra Chief Minister Eknath Shinde, along with a number of officials and business leaders would be present from India.

AAP leader Raghav Chaddha is also here, so are Telangana minister K T Rama Rao and Tamil Nadu minister Thangam Thennarasu.

Among business leaders, Gautam Adani, Sanjiv Bajaj, Kumar Mangalam Birla, N Chandrasekaran, Nadir Godrej, Ajit Gulabchand, Sajjan Jindal, Sunil Mittal, Roshni Nadar Malhotra, Nandan Nilekani, Adar Poonawalla, Rishad Premji and Sumant Sinha are likely to be present.

Artist Maya Lin, acclaimed soprano Renee Fleming and actors Idris Elba and Sabrina Dhowre Elba have been given the crystal awards.

Idris Elba and Sabrina Dhowre Elba have been presented the award for their leadership in addressing food security, climate change and environmental conservation, the WEF said.

Actor, filmmaker and humanitarian, Idris Elba, and his wife, the model, actress and humanitarian, Sabrina Dhowre Elba, were appointed UN Goodwill Ambassadors for IFAD in April 2020.

Top political leaders taking part include German Chancellor Olaf Scholz, European Commission President Ursula von der Leyen, European Parliament President Roberta Metsola, South Korean President Yoon Suk-yeol, South Africa President Cyril M Ramaphosa, Spain Prime Minister Pedro Sanchez, Swiss President Alain Berset and Finland Prime Minister Sanna Marin.

Other top leaders include John F Kerry, Special Presidential Envoy for Climate of the United States of America; Avril Haines, US Director of National Intelligence; Martin J Walsh, Secretary of Labor of the United States; Katherine Tai, United States Trade Representative; and Christine Lagarde, President, European Central Bank.

Heads of international organisations taking part include UN Secretary General Antonio Guterres, IMF Managing Director Kristalina Georgieva, WTO Director General Ngozi Okonjo-Iweala, NATO Secretary General Jens Stoltenberg and WHO Director General Tedros Adhanom Ghebreyesus.  

(With PTI and Reuters inputs.)