Middle East chief executives share global gloom on economic prospects

DAVOS: Global business chiefs are more pessimistic about prospects for the world economy than for many years, and senior executives in the Middle East are among the most gloomy, according to the annual survey of chief executive officers’ opinion released at the World Economic Forum annual meeting in Davos.

The poll — by consulting firm PwC — showed that a record number of CEOs were pessimistic about the international economy, with an average of 53 percent predicting a decline in the rate of growth in 2020.

While bosses in North America and Europe were particularly downbeat about prospects, with 63 percent and 59 percent saying they thought things would get worse this year, CEOs in the Middle East were also more gloomy than average, with 57 percent predicting lower growth this year.

Only China and India among the major economic blocs were less pessimistic on average, but there was a sharp decline in the number of Chinese executives who wanted to do business with the US — just 11 percent identified the US as their most attractive market, compared with 59 percent two years ago.

Trade wars, geopolitical tensions and climate change threats were the factors weighing most heavily on executive minds — apart from the standard complaints about over-regulation by governments.

Unveiling the 2020 results, PwC chairman Bob Moritz said: “Given the lingering uncertainty over trade tensions, geopolitical issues and the lack of agreement on how to deal with climate change, the drop in confidence in economic growth is not surprising – even if the scale of the change in mood is.”

Last year, there was a record number of CEOs who said they were optimistic about global economic growth, and only 29 percent said they were pessimistic.

“These challenges facing the global economy are not new. However, the scale of them and the speed at which some of them are escalating is new, the key issue for leaders gathering in Davos is: How are we going to come together to tackle them,” Moritz added.

The poll of 1,600 CEOs in 83 countries was taken toward the end of last year, before tensions in the Middle East escalated in the Arabian Gulf, but before the tentative “phase one” agreements on world trade between the US and China.

The poll was also taken before the Australian wildfires further highlighted fears of climate change — a major focus of the WEF meeting.

The poll also found CEOs less confident than ever in their own companies’ prospects, with only 27 percent of CEOs saying they are “very confident” in their own organization’s growth over the next 12 months – the lowest level PwC has recorded since 2009 and down from 35 percent last year.