Amid rising geopolitical risks, a majority of Indian CEOs in the survey indicated that they plan to reduce or cut operating costs, even as they are more optimistic about their country’s global economic outlook.
However, most companies do not plan to cut staff or pay, according to the annual global executive management survey released by consulting giant PwC on the first day of the World Economic Forum meeting here.
Changing Current Path
According to the survey, roughly four out of every ten CEOs 40% of global and 41% of Indian respondents) do not expect their companies to be financially viable in 10 years if they continue on their current path.
Additionally, around 78% of Indian CEOs, 73% of global CEOs, and 69% of Asia-Pacific CEOs believe that global economic growth will slow over the next 12 months. But the survey also found that, despite the gloomy global outlook, Indian CEOs are optimistic about the country’s economic growth. More than five in ten CEOs (57%) express optimism about the Indian economy over the next 12 months.
In comparison, only 37% of Asia-Pacific CEOs and 29% of global CEOs expect economic growth in their countries or regions to improve over the next 12 months. In addition, PwC said geopolitical flashpoints have led CEOs to consider disruptions to their operating plans. When asked what actions their company is considering in the next 12 months in relation to conflicts in Europe, 67% of Indian CEOs said they are regulating supply chains.
In addition, 59% emphasized that they diversify products and services; 50% emphasized increasing investments in cyber security and data protection; and 48% talked about adapting their presence in current markets and/or expanding into new markets. “Responding to the current environment, 93% of Indian CEOs (compared to 85% of global CEOs and 81% of Asia Pacific CEOs) say they are reducing or planning to reduce operating costs,” the survey report said. The survey was conducted between October and November 2022.
10 CEOs from 105 countries and territories, including 68 CEOs from India. India’s CEOs have identified key risks for the next 12 months include inflation, macroeconomic instability, climate change, and geopolitical conflict.
Cost-Cutting Edge
Nearly 60 percent of Indians reported that they are currently innovating new, climate-friendly products or processes. Cost cutting is high on the priority list across the board, with around 93% of Indian CEOs saying they are either cutting or considering cutting.
However, about 85 percent insisted they have no plans to reduce the size of their workforce, and 96 percent said they have no plans to reduce wages, demonstrating their determination to retain talent. Despite signs of a global economic slowdown, persistently high inflation, and the effects of conflict in Europe and around the world, India’s growth outlook was overwhelmingly positive.
According to the World Bank, India’s economy may grow more slowly in 2022–23 compared to 2021–22, but thanks to strong domestic demand, it remains one of the fastest-growing major economies in the world.
The World Bank also revised India’s GDP forecast for 2020 to 6.9% from 6.5% (October 2022), while the Reserve Bank of India slightly lowered its current fiscal forecast to 6.8% in its last report, which explains the same global slowdown.
