Davos/Jakarta. Business leaders in Indonesia and its Southeast Asian peers are faltering to maintain optimism for growth this year in the face of economic uncertainties and challenging business environment, according to recent survey by global consulting firm Pricewaterhouse Coopers.
PwC’s Annual Global CEO Survey, released on the eve of the World Economic Forum annual meeting in Davos, reported that only 38 percent of CEOs in Asean are confident of their growth in the next 12 months, a 9-points drop compared to last year.
Titled “Redefining business success in a changing world,” the survey interviewed more than 1,400 chief executives from 83 countries who participated in the survey.
“There’s no question that business leaders’ confidence in both the global economy and their own company growth prospects has taken a knock,” Dennis Nally, global chairman of PwC, said in a statement on Wednesday.
“The pessimistic outlook for the year ahead is reinforced by the position of the US, China, Germany and the UK as being the most important for growth again. The fact that CEOs continue to point to these ‘safe havens’ underlines the general uncertainty about where real growth will come from in the long term.”
At least 80 percent of Association of Southeast Asian (ASEAN) CEOs see more threats to growth today compared to three years ago, the PwC report said, due to looming threats from exchange rate volatility, social instability and geopolitical uncertainty. Executives are also increasingly worried of the availability of talent skills in the region, as well as eroding trust in doing business amid bribery and corruption cases, according to the report.
However, business leaders in Asean are slightly more upbeat that the global average as two-thirds of CEOs surveyed around the world are bracing for more business threats today compared to three years ago, PwC reported. Asean CEOs are also still optimistic for the next three years with 57 percent seeing growth opportunities in the future, according to PwC.
Indonesia stands out with strong prospects for growth within the Southeast Asia region, joining the likes of China, the United States and Vietnam, PwC Indonesia senior partner Irhoan Tanudiredja said.
“This is consistent with our view on the strong prospects of the Indonesian economy in the near future, particularly with the significant investments being made in vital infrastructure,” he said in a statement.
President Joko Widodo’s administration has been on a quest to speed up infrastructure development in the past year, backed by investments from the government and the private sector, in a bid to revive growth to 5.3 percent this year.
Global CEOs gloomy about growth prospects in 2016
PwC’s survey also showed that confidence amongst global CEOs is falling fast, at a time when the global economy faces serious threats.
It said more than 65 percent of CEOs surveyed see more threats facing their business today than three years ago.
The survey also notes that confidence in the global economy has fallen 10 points as a result of concerns over growing geopolitical uncertainty.
“Every major economy is showing decline in confidence,” said Dennis Nally, chairman of PwC. “India bucks the trend along with Spain and Russia.” The United States remains ahead of China in terms of driving global growth while Indonesia, together with many other emerging economies, has fallen.
“Geo-political issues were not even cited three to four years ago,” Nally added. “Now they are the second highest concern after over regulation.”
CEOs, he said, see a divergent and complex world. This is causing great uncertainty and CEOs must look beyond the more disruptive short-term challenges.
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