Davos 2019: Mideast CEOs turn gloomy on global economy, PwC study finds

Updated 22 January 2019
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Davos 2019: Mideast CEOs turn gloomy on global economy, PwC study finds

  • The loss of confidence from regional CEOs was the second biggest fall in the world, beaten only by North American bosses, whose optimism fell from 63 percent to 37 percent

DAVOS: Chief executives in the Middle East are much less confident on prospects for the global economy than they were in 2018, according to a report from accounting and consulting group PwC.

The firm’s annual survey of top bosses’ attitudes, traditionally launched on the eve of the World Economic Forum Annual Meeting in Davos, showed a big drop in the number of CEOs from the region who believe global economic growth will improve in the next 12 months.

Only 28 percent of Middle East business leaders now see an improvement in economic prospects, compared with 52 percent this time last year. Bob Moritz, global chairman of PwC, said: “The prevailing sentiment this year is one of caution in the face of increasing uncertainty.”

The loss of confidence from regional CEOs was the second biggest fall in the world, beaten only by North American bosses, whose optimism fell from 63 percent to 37 percent.

PwC said that the Middle East decline was due to “increased regional economic uncertainty,” while the North American fall was “likely due to the fading of fiscal stimulus and emerging trade tensions.”

The results of the PwC poll - conducted among 1,300 business leaders around the world - reflected an overall decline in business confidence in each region surveyed. Last year, only 5 percent of CEOs said that global economic growth would decline. For 2019, this has jumped to nearly 30 percent.

Globally, confidence in CEOs’ own companies to grow revenue this year has also fallen sharply. Moritz said: “With the rise in trade tension and protectionism it stands to reason that confidence is waning.”

The US retains its lead as the top market for growth among international investors, but many CEOs are turning to other markets, or investing at home. The ongoing trade conflict between the US and China has resulted in a sharp decline in the number of Chinese bosses chosing the US as a market for growth, down from 59 percent last year to only 17 percent for 2019.

Globally, CEOs are still more worried about the threat of over-regulation of their businesses - named as the top concern again in 2019 - but uncertainty about policy has become a major issue too.

In the Middle East, the main concern is geopolitical uncertainty, followed by the threat of cyberattack, policy uncertainty and the speed of technological change.


Germany sees ‘most difficult part’ in EU-US trade talks ahead

Updated 19 February 2019
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Germany sees ‘most difficult part’ in EU-US trade talks ahead

  • ‘For some weeks and months now, we’re observing with concern that the US is tightening its trade policies, that tensions are increasing’
  • ‘The impact can already be seen in the world economy, global growth has slowed’

BERLIN: The most difficult part in trade negotiations between Europe and the United States is starting now and talks should focus on reducing tariffs on industrial goods to increase the chances of a deal, German Economy Minister Peter Altmaier said on Tuesday.
A confidential US Commerce Department report sent to President Donald Trump over the weekend is widely expected to clear the way for him to threaten tariffs of up to 25 percent on imported autos and auto parts by designating the imports a national security threat.
“For some weeks and months now, we’re observing with concern that the US is tightening its trade policies, that tensions are increasing,” Altmaier told Deutschlandfunk radio.
“The impact can already be seen in the world economy, global growth has slowed,” Altmaier said.
Asked about the risk of higher US car tariffs, Altmaier said he did not buy the argument that imported cars would threaten the national security of the United States.
Altmaier, a confidant of Chancellor Angela Merkel, said that reducing tariffs on cars and other manufactured goods should be the main focus of the ongoing trade talks.
“We are not yet where we want to be. We might have made one-third of the way and the most difficult part will be now,” Altmaier said.
Altmaier added that he was in favor of reducing import tariffs for cars to the same level in the US and Europe, “ideally to zero percent.”
The trade talks will also be high on the agenda during a meeting of Altmaier with his French counterpart Bruno Le Maire in Berlin later on Tuesday.
Both ministers are expected to narrow differences on how far the negotiation mandate of the European Commission in the talks with the US should go and which areas should be excluded.
France is reluctant to open up its agriculture sector to US imports and Altmaier said he was fine with excluding the issue in the trade talks.
“Agriculture is a very sensitive topic, so we don’t want to talk about this in the current situation,” Altmaier said.
Altmaier and Le Maire are expected to hold a news conference after the talks.
European Commission President Jean-Claude Juncker told a German newspaper that Trump had promised him he would not impose additional import tariffs on European cars for the time being.
If Trump imposed tariffs on European cars, however, the EU would react immediately and not feel obliged to stick to its promise to buy more soybeans and liquefied gas from the United States, Juncker added.