Regardless of fears over an impending global downturn, deepening geopolitical uncertainties, and soaring inflation, Middle East CEOs are upbeat about their region’s economic growth in 2023. They are also very confident about prospects for business revenue growth over the next three years, according to a survey.
The confidence voiced by the CEOs about the Middle East in the PwC CEO survey resonates with the cautious optimism expressed by global business and economic bigwigs about the GCC region during their discussions at the recently concluded World Economic forum.
Most panellists sounded positive about the chances of the oil-exporting region navigating the looming global economic turmoil despite the geopolitical tensions.
The findings of the CEO survey outline how Middle East businesses are shining a beacon of confidence for 2023, giving a tangible glimpse into how they will navigate the global complexities during the months and years ahead and how this will shape the economies in which they operate.
Around two thirds of business leaders out of 4,400 CEOs polled in 64 countries expect an improvement this year. Over half of regional CEOs (58 per cent) are transforming their businesses by diversifying their products and services. They are also embracing new technologies, investing, driving cost efficiencies, and moving on deal activity reflecting continued momentum in capital market activity, especially within the UAE and Saudi Arabia.
According to WEF’s Global Risks Report 2023, the global cost-of-living crisis poses the largest threat to businesses in the UAE in the coming two years. Sustained high inflation and severe commodity price shocks also threatened business health in the country.
Economists believe that the outlook for the GCC in 2023 is more cautious given the weaker external environment, although the region will likely continue to outperform many developed economies in terms of GDP growth.
On their outlook for the global economy, CEOs, however, hold a pessimistic view. Some 73 per cent of global CEOs and 82 per cent of regional CEOs expect a decline in global growth over the next 12 months. Just 21 per cent of North American CEOs and 18 per cent of European CEOs are confident in revenue growth in their own markets. This contrasts sharply with the picture in the Middle East where 63 per cent of regional CEOs are confident about their own companies’ revenue growth over the next 12 months, with 71 per cent of senior executives confident about their outlook for the next three years.
Hani Ashkar, PwC Middle East senior partner, said macroeconomic volatility and geopolitical tensions are undoubtedly impacting the confidence of global CEOs' outlook for the year ahead.
“However, responses from Middle East leaders for our 26th Annual CEO Survey paint an encouraging picture for 2023, with almost 61 per cent of Middle East CEOs expecting regional economic growth to improve in 2023.”
The CEO survey outlines key takeaways on how CEOs in the region are moving ahead to future-proof their companies and stay ahead of longer-term challenges, said Ashkar.
Two-thirds of CEOs see technological disruption as a leading issue in the Middle East, with 84 per cent of regional CEOs expecting to invest in automation, artificial intelligence, and cloud technology in 2023 and 74 per cent to invest in upskilling their workforce.
“CEOs are turbocharging on digital transformation through further investment and, as the ESG agenda continues to play an important and strategic role in reimagining a sustainable future for our region, it is evident from our latest survey that the story has moved from talk and reflection to action when it comes to climate change,” Stephen Anderson, Middle East strategy and markets leader, said.
“The CEO survey demonstrates that regional business leaders are balancing confident growth prospects along with the challenges of transforming their business to ensure resilience in the face of global volatility and concerns about long-term viability.”
CEOs in the Middle East are actively preparing for a dynamic period ahead with 58 per cent of CEOs already transforming and strengthening their businesses. Unlike their global peers, regional business leaders are proactively accelerating M&A activity with 76 per cent not delaying deals versus 60 per cent globally. Nor are they slowing down on investments with 58 per cent of regional CEOs continuing to invest vs just 40 per cent globally.
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