A recent survey reveals amid rising geopolitical risks, Indian CEOs are planning to reduce operating costs, even as they are more upbeat than their global peers on their country’s economic prospects.
However, in the annual Global CEO Survey released by consultancy giant PwC on the first day of the World Economic Forum meeting, most of the companies do not plan to cut their headcount or salaries.
As per the survey, 4 out of 10 CEOs (40% of global and 41% of India respondents) think that if the companies follow the same path, they don’t expect their companies to be economically viable in 10 years.
Over the next year, about 78% of India CEOs, 73% of global CEOs and 69% of Asia Pacific CEOs believe that global economic growth.
Despite the gloomy global outlook, India CEOs is hopeful about the country’s economic growth. 57% of Indian CEOs have expressed optimism about India’s economy over the next 12 months.
Comparatively, only 37% of Asia Pacific CEOs and 29% of global CEOs expect economic growth to improve in their countries or regions over the next 12 months.
PwC further said geopolitical flash points have prompted CEOs to factor in disruptions in their scheme of things. Responding to a question on what actions, if any, their company is considering for the next 12 months because of the conflict in Europe, 67% of India CEOs said they are adjusting supply chains.
Talking about various resorts, 59% are diversifying products and services, 50% are increasing investments in cyber security and data privacy and 48% are adjusting their presence in current markets and/or expanding into new markets.
As per the survey report, 93% of India CEOs (as against 85% of global CEOs and 81% of Asia Pacific CEOs) say that they are reducing or planning to reduce operating costs in the light of current environment.
It was between October and November 2022 that this survey was conducted among 4,410 CEOs from 105 countries and territories, including 68 CEOs from India.
Indian CEOs have identified these as key threats for next year: inflation, macroeconomic volatility, climate change and geopolitical conflict.
Nearly 60% from India said they are currently innovating new, climate-friendly products or processes.
What is high on every priority list is cost cutting. As many as 93% of India CEOs saying they are cutting, have cut or are considering cutting operating costs and spurring revenue growth to mitigate economic challenges and volatility.
Speaking about the job slashes, 85% said stressed they will not reduce the size of their workforce. Whereas 96% stated they do not plan to reduce compensation – demonstrating their resolve to retain talent.
India’s Growth to be Positive due to Domestic Demand : World Bank
Despite evidence of a global economic slowdown, continuing high inflation and repercussions across the world of the conflict in Europe, the prognosis for India’s economic growth has largely been positive.
According to the World Bank, while India’s economy might show lower growth in 2022–23 compared to that in 2021–22, it will remain one of the fastest-growing major economies in the world because of its robust domestic demand.
The World Bank has also revised its 2022–23 GDP forecast for India upward to 6.9% from 6.5% (in October 2022), while the Reserve Bank of India, in its latest report, lowered its projection marginally to 6.8% for the current fiscal, attributing the same to a global slowdown.
