About 57% of India Inc. CEOs expect the country's economic growth to improve over the next 12 months even as 78% of CEOs foresee a decline in global economic growth over the next 12 months, according to a report by PwC.
This is the most pessimistic CEOs have been regarding global economic growth and is a significant departure from the optimistic outlooks of 2021 and 2022, PwC's 26th Annual Global CEO Survey reveals.
India CEOs' confidence in their own company's growth prospects declined significantly to 60% from last year's 83%. While cost cuts 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.
"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," says Sanjeev Krishan, chairperson, PwC India.
Around 41% of CEOs in India think their organisations will not be economically viable in a decade. In addition to a challenging environment, 41% of CEOs think their organisations will not be economically viable in a decade if they continue on their current path.
62% of CEOs in the country believe 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.
While cyber and health risks were the top concerns a year ago, the impact of the economic downturn is top of mind for India CEOs this year, with inflation (35%) and macroeconomic volatility (28%) leading the risks weighing on CEOs’ minds in the short term – the next 12 months – and over the next five years. Climate change is close behind (24%), followed by financial exposure to geopolitical conflict risks (22%) and cyber risks (18%).
Climate change gains prominence as a cause of concern for India CEOs over the next five years, with 31% voicing that they believe their companies will be extremely exposed to it. They also see climate risk impacting their cost profiles and supply chains over the next 12 months.
Indian CEOs noted the need to collaborate with a wide range of stakeholders to build trust and deliver sustained outcomes if they are to generate long-term societal value. 73% (54% global) of India CEOs collaborate with non-business entities to address sustainable development. while 57% (49% global) of CEOs collaborate on education. 31% of India companies are more likely to collaborate with industry consortia to create new sources of value, while only 22% work with industry consortia to address societal issues.
The survey polled 4,410 CEOs in 105 countries and territories, including 68 from India between October and November 2022.