Businesses deeply concerned about rising geopolitical risks: Poll
Hülya Güler - DAVOS
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The logo of the World Economic Forum (WEF) is seen on window pane at the Congress Center prior to the forum's annual meeting in Davos on January 18, 2016. AFP Photo
The confidence levels of global CEOs are at their lowest ebb than at any other time in the last three years, according to a report released on Jan. 19 by PriceWaterhouseCoopers (PwC) on the sidelines of the World Economic Forum (WEF) in Davos.In last year’s survey, geopolitical uncertainty appeared in the top 10 ranking of CEO concerns for the first time. This year, the issue jumped up to become the second-biggest concern, cited by 74 percent of business leaders.
This rate rose to 93 percent among Turkish CEOs, followed by foreign exchange fluctuations at 90 percent among Turks, according to the survey, which was conducted in the fourth quarter of 2015 in 83 countries.
The top concern of global CEOs was over-regulation, cited by some 79 percent of the survey participants, followed by geopolitical risks. CEOs named exchange rate volatility as their third top concern, followed by availability of key qualities and governments’ response to fiscal deficit and debt burden, according to the PwC survey, in which a total of 1,409 CEOs participated.
Despite huge stimulus and ultra-easy money that central banks have pumped into the system since the 2008 financial crash, only 27 percent of CEOs expect global economic growth to improve over the next 12 months, compared with around 40 percent at the same time last year.
Around 23 percent of CEOs expected the global economy would improve over the next 12 months amid concerns about the slowdown in the Chinese economy, oil slump and escalating geopolitical risks. This rate was around 17 percent last year.
For Turkish CEOs, the rising geopolitical risks will be the biggest threat for their businesses over the next year. This was followed by foreign exchange volatilities by around 90 percent and social instability by 77 percent.
According to the survey, the most optimistic CEOs about the global economy in 2016 were from the Middle East with 34 percent and Western Europe with 33 percent. Only 16 percent of North America-based CEOs expressed optimistic feelings for the next 12 months. The most concerned sectors were the banking, technology and insurance sectors in the U.S., Australia and Britain, according to the survey.
Only 35 percent of CEOs in the PwC survey said they were “very confident” of growing their company’s revenue in the next 12 months, down from 39 percent in 2015 and the lowest reading since 2010.
Confidence among U.S. chiefs fell to 33 percent from 46 percent in 2015, echoing similar declines in other Western countries including Germany and Britain.