A great majority of Indian CEOs indicated in a survey that they are reducing or aim to reduce operating costs in response to increased geopolitical threats, despite being more optimistic than their global counterparts about their country’s economic prospects.
The majority of companies do not intend to reduce personnel or pay, according to the annual Global CEO Survey conducted by PwC and released on the first day of the World Economic Forum.
Four in ten CEOs (40 percent of global respondents and 41 percent of India respondents) do not expect their companies to be commercially viable in ten years if the current trajectory is maintained.
Additionally, almost 78% of India CEOs, 73% of worldwide CEOs, and 69% of Asia Pacific CEOs anticipate a reduction in global economic growth during the next 12 months. Despite the grim global picture, India’s CEOs are optimistic about the country’s economic progress, according to the study. 57% of chief executive officers are optimistic about India’s economy during the next 12 months.
Comparatively, only 37% of Asia Pacific CEOs and 29% of global CEOs anticipate that economic growth will increase in their respective nations or regions during the next 12 months.
PwC added that geopolitical flashpoints have encouraged CEOs to incorporate interruptions into their plans. When asked what, if anything, their company is doing because of the war in Europe for the next 12 months, 67% of India’s chief executive officers said they are changing their supply chains.
Also, 59% said they are adding new products and services, 50% said they are putting more effort into cyber security and data protection, and 48% said they are changing their position in existing areas and/or entering new markets.
In reaction to the current environment, 93% of India CEOs (compared to 85% of global CEOs and 81% of Asia Pacific CEOs) say they are decreasing or aiming to reduce operational costs, according to a survey report.
Between October and November 2022, 4,410 CEOs from 105 countries and territories, including 68 CEOs from India, took part in the study.
Indian CEOs recognised inflation, macroeconomic volatility, climate change, and geopolitical conflict as key challenges for the next 12 months. Nearly 60% of the Indian people who answered the survey said that they are making new products or processes that are better for the environment.
Cost reductions remain a top focus everywhere, with 93% of India CEOs indicating that they are cutting, have reduced, or are considering cutting operational expenses and boosting revenue growth in order to overcome economic problems and volatility.
About eighty-five percent claimed that they will not downsize their personnel, and ninety-six percent stated that they will not lower wages, proving their commitment to retaining talent.
Despite evidence of a worldwide economic downturn, persistently high inflation, and global consequences of the European crisis, India’s economic growth outlook has remained mostly optimistic.
Even though India’s economy may grow more slowly in 2022–23 than it did in 2021–22, the World Bank says that its strong domestic demand will keep it as one of the world’s fastest-growing major economies.
In October 2022, the World Bank increased its GDP forecast for India for 2022–23 from 6.5 percent to 6.9 percent, while the Reserve Bank of India dropped its projection for the current fiscal year to 6.8 percent, attributing the change to a global slowdown.