The greatest treat to the business growth is the rise of economic nationalism as initiated by Brexit, Donald Trump and some populist policies, say business leaders around the world.
This was concluded in a study conducted by accountancy firm KPMG through a survey that comprised of 1,300 chief executives of some of the biggest companies in eth world. The study found that the British business leader4s appeared to hold a greater pessimistic view compared to the other business leaders.
While about two-thirds of CEOs from UK complained about the growing use of protectionism being their greatest worry, half of the CEOs from other countries surveyed said the same. Protectionism events identified by them included the likes of import tariffs and quotas.
While such trade barriers have the impact of protecting jobs in the economies where they are implemented, but the short-term benefits are little compared to the higher price that consumers have to pay, argued the business leaders.
Bill Michael, UK chair at KPMG, said: “If world trade doors continue to close, there will be an inevitable impact on global growth. This persistent retrenchment is of huge concern to the business leaders I speak to.”
These views by business honchos come at a time when the United States and China are trying ot back out from the potential trade war that loomed large as both countries threatened to impose high import tariffs on each other. Economists feared that such a trade war would have been severely detrimental for the global economy.
Both China and the U.S. have said that they had reached “a consensus on taking effective measures” to reduce the US trade deficit with China and hence the proposed tariffs were to put “on hold” by Washington.
There was a rally in the global financial markets following the statement which pushed the FTSE 100 to a record high. however, there are apprehensions that the world markets could again be rattled by the likelihood of a coalition coming to power in Italy that would be opposed to the EU establishment.
Over the coming year, slow growth in their companies can be triggered by geopolitical risks, regulations and investment in technology said most chief executives in the KPMG survey which comprised of 150 CEOs from UK and about 1,150 from elsewhere around the globe.
the progresses that have been made in Brexit talks have been unable to prop up the pessimism of the European business leaders. Another study conducted by accountancy company Deloitte on chief financial officers, found that 12 per cent of the respondents were apparently more optimistic about the growth for their business which was little more than the 11% the same report noted in the autumn.
The survey was conducted 1,652 chief financial officers from across Europe and half of the respondents opined that they were anticipating a high level of financial and economic uncertainty. In the same survey, the gloomiest outlook was reported by the business leaders in the UK. And out of the companies from 20 EU nations who were surveyed in the study, the lowest investment intentions were expressed by British companies.
Ian Stewart, the chief UK economist at Deloitte said: “Europe’s recovery saw a slight loss of momentum in the first quarter, with CFO optimism and revenue expectations nudging lower. But outside the UK, businesses are upbeat about spending and hiring.”
(Adapted from TheGuardian.com)