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On the other hand, Indian chief executive officers (CEOs) showed the second-highest level of confidence at 40 percent after China’s 45 percent when it came to overall revenue growth prospects of their own companies, as per the annual PwC CEO survey released here during the World Economic Forum annual meeting.
Overall, CEOs are not so positive about their own companies’ prospects for the year ahead, with only 27 percent of global CEOs saying they are very confident in their own organization’s growth over the next 12 months the lowest level seen since 2009 and down from 35 percent last year.
While confidence levels are generally down across the world, there is a wide variation from country to country. China and India showed the highest levels of confidence among major economies at 45 percent and 40 percent, respectively.
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When asked about their own revenue growth prospects, the change in CEO sentiment has proven to be an excellent predictor of global economic growth, PwC said.
Analyzing CEO forecasts since 2008, the correlation between CEO confidence in their 12-month revenue growth and the actual growth achieved by the global economy has been very close, it said.
If the analysis continues to hold, global growth could slow to 2.4 percent in 2020, below many estimates including the 3.4 percent October growth prediction from the IMF, PwC said.
For the first time, more than half of the CEOs surveyed by PwC said they believe the rate of global GDP growth will decline.
While 53 percent projected a decline in global economic growth (up sharply from 29 percent last year), only 22 percent expected improvement (down from 42 percent).
The survey covered nearly 1,600 CEOs in 83 territories. It can be noted that IMF lowered its growth projections on Monday itself in an update here in Davos.
PwC said China is looking beyond the US for growth, even as overall the US just retains its lead as the top market CEOs look to for growth over the next 12 months at 30 percent, one percentage point ahead of China at 29 percent.
However, ongoing trade conflicts and political tensions have seriously dented the attractiveness of the US for Chinese CEOs.
In 2018, 59 percent of China CEOs selected the US as one of their top three growth markets, in 2020 this has dropped dramatically to just 11 percent.
The US loss has been Australia’s gain, with 45 percent of China CEOs now looking to Australia as a top-three key growth market compared with only 9 percent two years ago.
The other countries making the top five for growth are unchanged from last year Germany (13 percent), India (9 percent) and the UK (9 percent). A strong result for the UK given the uncertainty created by Brexit. Australia is just outside the top five boosted by its increased attractiveness for China CEOs.