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Sunday 22.07.2018 | Name days: Marija, Marika, Marina

Eastern European CEOs are optimistic the least about economic growth perspective

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The proportion of CEOs in the world who predict improvements in global economic growth in the next 12 months has growth to 44% this year, as opposed to 18% last year. The proportion of CEOs who do not expect any improvements to come in 2014 is now only 7%, as opposed to 28% last year.

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUCEOs from Western Europe are the most optimistic about the recovery of global economy (50%). They are followed by the Middle East (49%), Asia and the Pacific Ocean region countries (45%), Latin America (41%), North America (41%) and Africa (40%). CEOs of Central and Eastern Europe, including Latvia, are the least optimistic about global economy recovering in the near future (26%). CEOs of this region are certain that global economy will remain at the same development level as it is at the moment (56%).

Tourism and leisure sector employees are optimistic the most about the chances of global economy growing in the near future (46%), followed by banking and financial sector (45%), retail trade (44%), financial service providers (44%), asset management sector (44%), communications representatives (44%) and construction sector (41%). Those working in the metalworking sector are optimistic the least (19%).

39% of CEOs are confident in their plans to expand in the next 12 months. This is slightly more than there were last year (36%). Optimism was at its lowest in 2009 – 21%. CEOs of the Middle East are confident the most in their expansion plans (69%), followed by Asian and Pacific CEOs, whose confidence has reached 45% this year (36% last year), according to 17th Global CEO Survey data.

Confidence in Western Europe has grown 8%, reaching a total of 30%. Confidence in Africa, on the other hand, continues to decline. Only 40% of CEOs in Africa are confident about economic growth in the next 12 months, which is lower than last year (44% in 2013 and 57% in 2012). Confidence in Latin American countries has declined as well – 43% this year (53% last year). The situation in North America remains stable – 33% of CEOs there are confident about economic growth. It should be added that 37% of CEOs of Central and Eastern Europe, including Latvia, are very confident about expanding their enterprises in the next 12 months.

Confidence varies notably in terms of countries. CEOs with most confidence in the future work in Russia (53%), followed by Mexico (51%), Korea (50%), India (49%), China (48%), Switzerland (42%), Brazil (42%), the USA (36%), Germany (33%), United Kingdom (27%), Canada (27%), Japan (27%), Italy (27%), France (22%) and Argentina (10%).

In regard to global economic risks, interviewed CEOs mention concern over the decline in development rates of developing countries (65%) and sluggish growth in developed countries (71%). Other concerns revolve around growing taxes (70%), lack of qualified employees (63%), currency exchange rate fluctuations (60%) and instability of the financial market (59%).

Current regulations have increased costs for 80% of CEOs and made it more difficult for 54% of CEOs to find qualified employees. 40% claim regulations discourage them to explore new markets and consider introducing innovative solutions. On a more beneficial side, CEOs say strict regulations help them improve the quality of their services and their availability.

When asked to name three main priorities politicians should address, CEOs mention financial stability (53%), improve infrastructure (50%) and provide support in order to increase international competitiveness and tax system (50%).

According to results of the survey, it seems CEOs believe the international tax system has been successful. Nearly two-thirds of respondents claim the international tax system should be completely remodelled.

Most CEOs believe the control over tax system and competitiveness are two of the most important factors in corporate decision making. They agree that international companies should inform authorities about their income and tax payments in every country where they have offices. They also agree tax control authorities around the world should freely exchange such information with each other.


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