Two in three CEOs in India expect a recession in 12 months says survey

• Two in three Indian CEOs are expecting a recession in the next 12 months, according to a new report.
• The report adds that CEOs are now better prepared for short-term challenges than they were in 2019 or 2020.
• Despite this, more Indian CEOs are confident about the resilience of India than their own companies.

Indian chief executive officers (CEO) are more optimistic about the economy than their global counterparts, according to a new survey. While 66% of Indian CEOs are expecting a recession in the 12 months, the number climbs up to 86% globally.

According to the KPMG 2022 India CEO Outlook, nearly three out of five CEOs around the world think that the recession will be mild and short.

Over half of Indian CEOs – at 55% – have plans in place to deal with a recession. However, they also expect it to have a 10% hit on their earnings. More CEOs in India are anticipating 10% earnings hit at 86%, while it is 71% globally.

“CEOs in India surveyed appear confident in their organisation’s resilience, they also seem to have prepared themselves to make the most of the current environment, brought on by the promise of technology, talent and ESG,” said Yezdi Nagporewalla, CEO, KPMG in India.

CEOs are better prepared for recession – here’s how

As per the report, CEOs all over the world are better prepared now when compared to 2019 or 2020 when it comes to weathering short-term challenges, while still expecting growth over the longer term.

According to the report, 2 out of 5 CEOs are prepared to reduce their margins and improve cost management. One in 3 CEOs are prepared to boost productivity, diversify their supply chains, and implement a hiring freeze.

Specifically, 70% of Indian CEOs plan to implement a hiring freeze in the next six months, as against 75% global CEOs. The numbers increase slightly when it comes to downsizing – 75% Indian CEOs are planning it in the next six months, as against 80% globally.

Other risks outlined in the report are pandemic fatigue, rising interest rates, and inflation.


More Indian CEOs are focusing on organic growth, partnerships and geopolitical risk management

The Russia-Ukraine war and the Covid-19 pandemic prior to that, have underlined the importance of geopolitical risk management. For instance, companies like Tata Steel and Infosys ended their business ties with Russia earlier this year.

“The pandemic and the events in Europe have shown us how interconnected we are as a world. To me, geopolitical issues are the number one risk. I think we all need to build optimised and resilient supply chains,” said T V Narendran, CEO and MD of Tata Steel.

According to the report, more Indian CEOs are now focusing on organic growth, partnerships and geopolitical risk management for the next three years, compared to their global peers. While 78% of Indian CEOs are focused on these three areas to achieve their growth objectives, the number falls to 68% for global CEOs.


Indian CEOs are more confident about the country’s resilience than their company’s

While a majority of Indian and global CEOs are confident about the resilience of their companies, more Indian CEOs are confident about India’s resilience than their own company’s.

According to the report, 82% of Indian CEOs are confident about India, while only 75% are confident about their own company’s resilience.

The scenario is opposite in the case of global CEOs who are more confident about their companies than countries.

Overall, Indian CEOs are more optimistic about the global economy than their global counterparts – the numbers stand at 82% for Indian CEOs, and 73% for global CEOs.

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