Saudi CEOs Optimistic About Kingdom’s Economic Growth Despite Inflationary Pressures and Geopolitical Tensions
A recent global survey by KPMG reveals that the majority of CEOs in Saudi Arabia are optimistic about the Kingdom’s economic growth over the next three years, despite inflationary pressures and geopolitical tensions. The survey shows that 74 percent of Saudi chief executives are confident about the economic growth of the Kingdom over the next three years, compared to just 60 percent who are optimistic about global progress. Furthermore, only 20 percent of Saudi CEOs foresee a recession in the coming year, compared to 90 percent of global chief executives who expect a downturn around the corner. However, most of them expect it to be mild and short.
Navigating the Unpredictable
“While it is unsurprising that the economic climate is a top concern for business leaders, they have learned to navigate the unpredictable by realigning their workforces, untangling supply chain disruptions, and adapting to geopolitical and economic impacts over the last three years,” said Abdullah Al-Fozan, chairman and CEO of KPMG in Saudi Arabia, in a statement.
Pandemic Fatigue and Economic Uncertainty
“Given the global ambiguity of the times, it should come as no surprise that pandemic fatigue and economic uncertainty — inflation, rising interest rates — were the two largest concerns for CEOs in Saudi Arabia and around the world in our latest survey,” added Al-Fozan.
ESG Programs
The study further revealed that Saudi CEOs are only partially convinced that environmental, social, and governance (ESG) programs could improve financial performance, with just 40 percent believing in their efficacy, down from 60 percent a year ago. In contrast, 35 percent of global CEOs see ESG programs as beneficial to financial performance. However, 34 percent of Saudi CEOs and 62 percent of business chiefs from across the world are looking to invest at least 6 percent of their company’s revenues in sustainability-related programs.
“Despite the variety in standards and regulations related to the ESG, investors and asset managers are increasingly considering it as a key component in their evaluation matrix,” said Fadi Al-Shihabi, head of ESG and sustainability at KPMG in Saudi Arabia.
Digital Innovation
On the technology front, 80 percent of Saudi CEOs and 70 percent of business leaders worldwide were keen on investing in digital innovation and areas where they face digital obsolescence.
“By employing advanced analytics and automation tools, companies can gain greater visibility and control over their supply chains, which can help them make more informed decisions and reduce risks,” said Mohammad Al-Razaz, CEO of software development firm OTO.
Conclusion
The KPMG survey shows that Saudi CEOs are optimistic about the Kingdom’s economic growth over the next three years, despite inflationary pressures and geopolitical tensions. They have learned to navigate the unpredictable by realigning their workforces, untangling supply chain disruptions, and adapting to geopolitical and economic impacts over the last three years. Pandemic fatigue and economic uncertainty are the two largest concerns for CEOs in Saudi Arabia and around the world. While Saudi CEOs are only partially convinced that ESG programs could improve financial performance, they are looking to invest in sustainability-related programs. On the technology front, Saudi CEOs are keen on investing in digital innovation and areas where they face digital obsolescence.