98% CEOs say coming recession could be worse than the financial crisis

The fear of recession is gripping the honchos of the globe's big and small firms. A vast majority of them, who account for a staggering 98%, feel an economic downturn is looming on the horizon. 

According to them, the economic crisis is precipitated by geopolitical tensions, supply chain disruption, and ongoing Covid-19-related uncertainty.

These are some of the findings of the EY CEO Outlook Pulse – January 2023 that portray the uncertainty that looks set to define the business environment in 2023.

The survey encapsulates the views of 1,200 CEOs across the globe on  prospects, challenges and opportunities.

According to the study,  48% of them foresee a moderate slowdown in the global economy, while more than half 55% of those preparing for a persistent downturn fear a recession worse than the global financial crisis of 2007-08 in terms of its length and severity.

Almost 32% of respondents feel uncertainty around the direction of monetary policy and an increase in the cost of capital to be the greatest risks to the future growth of their business.

While concerns over Covid-19-related uncertainty have subsided, almost a third of respondents accounting for 32% still view this as a key risk to their business down from 43% in October 2022.

Andrea Guerzoni, EY Global Vice Chair – Strategy and Transactions, said: “Whether CEOs anticipate a moderate or severe downturn, they know that this recession will be different. A combination of new factors, ranging from a re-alignment of geopolitics to a re-assessment of global supply chains, are supplementing pre-existing issues and threatening investment plans. Fiscal and regulatory policy will be front of mind, as CEOs consider what levers to pull to survive this slowdown.”

CEOs eye deals and investment in sustainability and people as routes to growth.

Despite the gloomy outlook, CEOs are on the lookout for opportunities to gain competitive advantage. Dealmaking of one kind or another remains a priority for respondents (89%) over the next 12 months with nearly half (46%) planning to move ahead with M&A, 58% with joint venture or strategic alliances and 34% with divestments.