According to a survey by Klynveld Peat Marwick Goerdeler (KPMG), 86 percent of global Chief Executive Officers (CEOs) who were surveyed believe the recession will be mild and short-lived. The KPMG 2022 CEO Outlook also cited CEOs predicting the recession to hit over the next year.
The danger of recession has increased in the last few months as central banks globally are raising interest rates to control high inflation fueled by various factors such as the pandemic and Russia’s invasion of Ukraine.
Recession: A post-pandemic hurdle
The CEOs explained their strategies and outlook during the survey. In the KPMG 2022 CEO Outlook, senior executives, accounting for 14 percent, recognized recession as among the biggest concerns today. Earlier this year, it was nine percent, with pandemic fatigue, at 15 percent, topping the list.
The majority of the top executives opined that the recession will be the biggest hurdle in the post-pandemic recovery. The survey cited 73 percent of CEOs who believe the recession will hurt the predicted growth over the next three years. 75 percent said that it will make it hard to recover post-pandemic. The survey said that 71 percent of CEOs are predicting it will impact company earnings by up to 10 percent.
At the start of this week, International Monetary Fund MD Kristalina Georgieva said that a view of the global economy is apparently “darkening” due to the effects of the pandemic, Russia’s war on Ukraine, and various natural calamities on every continent, and this can get more severe.
Optimism for future growth
However, the economic survey also showed a higher level of confidence among the CEOs (73 percent) about the strength of the economy over the next six months than in the first half of the year (60 percent), at the time KPMG surveyed 500 CEOs for its CEO Outlook Pulse survey.
Additionally, 71% of executives are optimistic about the prospects for the global economy’s growth over the next three years, up from 60% at the beginning of 2022, and 85% are optimistic about the future growth of their organizations.
The World Bank stated last month in a comprehensive new study that a string of financial crises in emerging markets and developing economies would have a long-term negative impact on them and that as central banks raise interest rates to control inflation, the world may be edging toward a global recession in 2023.
