According to PwC's 26th global CEO survey, 78% of India CEOs believe that global economic growth will decline over the next 12 months.This is a significant departure from the optimistic outlooks of 2021 and 2022.
In addition, 41% of India CEOs believe that their organisations will not be economically viable in a decade if they continue on their current path.
Despite the gloomy outlook on global economic growth, 57% of India CEOs express optimism about India's economy over the next 12 months, with only 37% of Asia Pacific CEOs and 29% of global CEOs expecting economic growth to improve in their countries or regions over the next 12 months.
The survey, which polled 4,410 CEOs in 105 countries and territories, including 68 from India between October and November 2022, found that inflation (35%), macroeconomic volatility (28%), geopolitical conflict (25%), and climate change (24%) are seen as the top threats to economic growth.
Cyber and health risks, which were top concerns a year ago, have fallen from the list of top threats.
India CEOs also identified changing customer demand and changes in regulations as significant concerns, with 62% believing that changing customer demand will impact profitability in their industry over the next ten years to a large or very large extent, while 54% are concerned about changes in regulations.
In terms of response to these challenges, almost half of the respondents that are exposed to geopolitical conflict have integrated a wider range of disruptions into scenario planning and corporate operating models, either by increasing investments in cybersecurity or data privacy (50%), adjusting supply chains (67%), re-evaluating market presence or expanding into new markets (48%), or diversifying their product/service offering (59%).
In terms of cost-cutting measures, while they are high on the priority list globally, 85% of India CEOs do not plan to reduce headcount, and 96% do not plan to reduce compensation, demonstrating their resolve to retain talent.
Climate change is also a growing concern for India CEOs over the next five years, with 31% believing that their companies will be extremely/highly exposed to it, and see it impacting their cost profiles and supply chains over the next 12 months.
Sanjeev Krishan, Chairperson, PwC in India, said:“Despite signs of a global economic slowdown, continuing high inflation and the ripple effects of the conflict in Europe, there is optimism among India CEOs about the country’s economic growth."
"To survive over the next few years, CEOs will need to manage external risks and drive profitability. In the long term they will also need to reimagine, reinvent and reconfigure their businesses and work culture to thrive. Importantly, they need to act on both now, and simultaneously.”