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

Updated 22 January 2019

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.


Saudi finance minister reassures public on taxes

Updated 10 December 2019

Saudi finance minister reassures public on taxes

  • Mohammed Al-Jadaan: There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully
  • The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year

RIYADH: Saudi finance minister Mohammed Al-Jadaan pledged that there would be no more taxes or fees introduced in the Kingdom until the social and economic impact of such a move had been fully reviewed.

He was speaking at the 2020 Budget Meeting Sessions, organized by the Ministry of Finance and held in Riyadh on Tuesday, where a number of ministers and senior officials gathered following the publication of the budget on Monday evening.

“There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully, especially in terms of economic competitiveness,” said Al-Jadaan.

The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year and more than 10 percent higher than the expected budget for this year. 

Most of that increase has come from taxes on goods and services which rose substantially as a result of the improvement in economic activity over the year.

The reassurances from the minister come as the Saudi budget deficit is estimated to widen to about SR187 billion, next year, or about 6.4 percent of GDP.