Davos // Fewer Middle East chief executives are optimistic about prospects for growth at their companies in the coming 12 months than they were last year, according to the annual survey of business leaders conducted by the international accounting firm PwC.
The percentage of chief executives from the region who said they were “very confident” of growth in their businesses fell to 44 per cent this time from 69 per cent last year, the study showed.
The survey – launched at the annual meeting of the World Economic Forum in Davos – also revealed that about 71 per cent of regional chief executives planned to implement a cost-reduction initiative over the next 12 months, but only 16 per cent planned to cut their workforce.
Middle East chief executives are also overwhelmingly concerned about the possibility of social instability in the region. About 80 per cent named this as a main concern.
The survey was conducted in the final quarter of last year as the big slide in the oil price was gaining momentum.
“The fall in the oil price is a factor for sure,” said Dennis Nally, PwC’s chairman. “It impacts CEOs’ thinking about their business, and can have a very negative impact on a company and a country, as we’ve seen in Russia. Chief executives believe this will be much more prevalent in 2015.”
Regional chief executives regard the United States and the UAE as the most important countries for growth this year Egypt was third.
On the global stage, fewer chief executives than last year think that global economic growth will improve over the next 12 months, with only 37 per cent expecting an increase in growth, down from 44 per cent last year. Significantly, 17 per cent believe global economic growth will decline, more than twice as many as last year.
Executives in Asia Pacific are the most optimistic, followed by the Middle East and North America. Chief executives in central and eastern Europe were the least optimistic.
On Tuesday, the IMF said it had lowered its forecast for global growth this year as the boost from lower oil prices was outweighed by weaker prospects for China and the euro zone.
“The world is facing significant challenges, economically, politically and socially,” said Mr Nally. Chief executives overall remain cautious in their near-term outlook for the worldwide economy, as well as for growth prospects for their own companies. While some mature markets like the US appear to be rebounding, others, such as the euro zone, continue to struggle.
“CEO confidence is down, notably in oil-producing nations around the world as a result of plummeting crude oil prices. Russian CEOs, for example, were the most confident in last year’s survey, but are the least confident this year. Confidence also slipped among CEOs in the Middle East, Venezuela and Nigeria.”
The IMF’s projections indicate that Russia is currently in recession and that its economy will shrink by 3 per cent this year, as sanctions, low oil prices and the dramatic fall of the rouble cut export income.
fkane@thenational.ae
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BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
Martin Sabbagh profile
Job: CEO JCDecaux Middle East
In the role: Since January 2015
Lives: In the UAE
Background: M&A, investment banking
Studied: Corporate finance
Pearls on a Branch: Oral Tales
Najlaa Khoury, Archipelago Books
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Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
SPECS
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If you go
The flights
Emirates (www.emirates.com) and Etihad (www.etihad.com) both fly direct to Bengaluru, with return fares from Dh 1240. From Bengaluru airport, Coorg is a five-hour drive by car.
The hotels
The Tamara (www.thetamara.com) is located inside a working coffee plantation and offers individual villas with sprawling views of the hills (tariff from Dh1,300, including taxes and breakfast).
When to go
Coorg is an all-year destination, with the peak season for travel extending from the cooler months between October and March.
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The specs
Engine: four-litre V6 and 3.5-litre V6 twin-turbo
Transmission: six-speed and 10-speed
Power: 271 and 409 horsepower
Torque: 385 and 650Nm
Price: from Dh229,900 to Dh355,000
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
THE BIO: Martin Van Almsick
Hometown: Cologne, Germany
Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)
Favourite dessert: Umm Ali with dark camel milk chocolate flakes
Favourite hobby: Football
Breakfast routine: a tall glass of camel milk
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UAE currency: the story behind the money in your pockets
Punchy appearance
Roars of support buoyed Mr Johnson in an extremely confident and combative appearance
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