Global executives are more reserved regarding the global economic outlook, while they still expect their companies to perform strongly and increase their profits. Some common risk and threads remain in the businessmen’s minds.
Only one in six executives say that the economy has improved in the past six months, outlines the latest economic conditions snapshot from McKinsey. Half say even, that conditions have worsened during that time. Thereby, emerging market and developed market executives are equally negative about the global position.
Looking ahead, only 29 percent of executives believe the global economic situation to improve. On the other hand, 32 percent expect it to worsen. Regarding their home markets, developed economy executives are more positive than for emerging markets. Most executives are negative for emerging economies, while expecting a steady development in developed economies.
Especially for Asia, respondents are negative as 46 percent state the domestic economic conditions have been worsened in the last months. Despite long-standing concerns about China’s economic development, unemployment has emerged as another potential thread. Half of executives expect it to rise in the next six months. For the short term, this could have far-reaching implications for the world economy.
Asked about threads for the global economy, China’s economic slowdown is stated most often except from European executives. Besides geopolitical instability, it is seen as the biggest risk for the economy. For developed economies, instability in the Middle East and North Africa is the likeliest thread. For emerging market managers, its a decrease in foreign investments and the volatility of oil prices.