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Over 70% of CEOs surveyed by PwC expect global growth to decline in 2023.
This is in line with projections by the likes of the Organisation for Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF) that global growth would slow this year in the light of the higher-than-expected consumer inflation and expectations that central banks would continue to hike interest rates albeit at a less aggressive rate.
The OECD had forecast global growth of 2.2% while the IMF had forecast a 2.7% rise.
The PwC’s 26th Annual Global CEO Survey polled 4 410 CEOs in about 105 countries towards the end of 2022 and found these leaders not hopeful about the next 12 months.
“The bleak CEO outlook is the most pessimistic that CEOs have been regarding global economic growth since we began asking this question 12 years ago and is a significant departure from the optimistic outlooks of 2021 and 2022 when over two-thirds (76% and 77%, respectively) thought economic growth would improve,” the survey found.
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Nearly 40% of CEOs did not think their organisations would be economically viable in a decade if they continued on their current path.
The report read:
PwC Global chairperson Bob Moritz said:
"The world continues to change at a relentless pace, and the risks facing organisations, people — and the planet — will only continue to rise. If organisations are not only to thrive but survive the next few years they must carefully balance the dual imperative of mitigating short-term risks and operational demands with long-term outcomes — as businesses that don’t transform won’t be viable," Moritz said.
Locally, there were concerns over load shedding and in certain Southern African countries, currency depreciations and inflation, and specific skills requirements and growth opportunities.
The ongoing energy crisis on the back of Russia’s war in Ukraine has created a challenging environment to do business in and threatens global growth. The war resulted in bottlenecks in global supply chains, forcing countries to be protectionist and inward-looking when dealing with trade matters and creating a wave of uncertainty that still lingers.
In response to the current economic climate, CEOs are looking to cut costs and increase revenue growth.
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"Fifty-two percent of CEOs report reducing operating costs, while 51% report raising prices and 48% diversifying product and service offerings.
"However, more than half (60%) say they do not plan to reduce the size of their workforce in the next 12 months.
"A vast majority (80%) indicate they do not plan to reduce staff remuneration in order to retain talent and mitigate workforce attrition rates," the survey read.
