Only 28 per cent CEOs expect further downtrend in the global economy this year, while 18 per cent expected an improvement, and more than 50 per cent expected it to remain same, according to an annual global CEO survey conducted by consultancy giant PricewaterhouseCoopers (PwC) that was released on the sidelines of the World Economic Forum (WEF).
The chief executive officers (CEOs) of Indian companies have emerged as the most optimistic lot in the world when it comes to expectations for improvement in global economy this year and revenue prospects of their own businesses in the longer term.
The high confidence levels of Indian CEOs is in sharp contrast to the declining confidence level of CEOs across the world in their own businesses as well as for the broader economic scenario, news agency PTI said.
NDTV's Namrata Brar spoke to Dennis Nally, chairman, Pricewaterhousecoopers International, at the WEF. Here is the transcript of the interview:
Namrata Brar: Dennis Nally, such a pleasure to have you on NDTV.
Dennis: Great to be with you.
Namrata: In many senses PricewaterhouseCoopers (PwC) sets the tone here at Davos with its global chief executive officers (CEOs) survey, but your survey this time around is not all that optimistic if you look at it, is it?
Dennis: Well it depends on how you look at it. It is certainly a surprise to us in terms of confidence levels of CEOs today. We were expecting something different when we started the survey several months ago, but as we started to dig into the detail. It starts to make some sense and what i mean by that is when the CEOs are essentially saying that they expect the global economy in 2013, so there is no significant improvement and decline. It also suggests that the confidence levels are down because I think there was an expectation that this global economic recovery would've been accelerated and it has not, so I think that's what's impacting CEOs confidence level this year in comparison to a year before.
Namrata: You describe it as the most disruptive decade that CEOs have witnessed and one of the key problems here is sovereign governments and the fact that global governments are at the crux of the problem right now. Is there a fear somewhere of a global debt crisis?
Dennis: I think the whole issue of governments is a big issue with CEOs, they are concerned about the debt issues. They are also concerned about government deficits, regulations, uncertainty of all of that and the taxes. One of the key issues highlighted by CEOs was an increasing tax burden and so when you think about it what the business community is really saying is that we need to have some clarity on how some of these issues are going to be resolved. Without that clarity it creates uncertainty and it basically says to a CEO, "I am going to be reluctant to invest and add resources, I am going to be very cautious and that's the behavior you see coming through the survey this year."
Namrata: Okay I know you were in India just a few days ago and one set of your charts says global CEOs' confidence is down but India surprisingly is much more optimistic, CEOs over there are second only to Russia in terms of their optimism where's that coming from?
Dennis: Well I think it points to the stupendous potential India has as an economy and the CEOs there realize that, they see it, not to say that India does not have challenges as you well know. But they see a very strong middle class developing which has got a lot of potential and so when you think about growth prospects CEOs are saying that there are real opportunities here, if I have the right products, the right services, in order to meet that demand and so that's where you see that confidence coming through.
Namrata: I am going to ask one final question and i am going to get the chart here, you talked about top 10 countries that are growth markets & India has about per cent at number 5, the fact is that there's a huge difference between the China and India right now, 31 per cent to China, then US gets about 23%, has an India fatigue set in?
Dennis: Well not really. I think what you're seeing here coming out of the survey is, a real decision by CEOs to say that we are going to focus our investments and will look to the best opportunities to invest in the future and a big part of it deals with regulation, rule of law, infrastructure, a big part of it delays with policies that encourage foreign investment and so the CEOs are saying is that we're looking for legitimate trade-offs here whether its India, China, Brazil versus Indonesia all of those are on the table for consideration. In other words, it has become a competitive environment for attraction of investment and capital. Therefore as India thinks about its future, it has to think about not only how it stack up internally but also how it stack up against all these other countries and that's the real message that seems to be coming through.
Namratra: Absolutely. We have to spice up our palette. Thank you so much.