Web Stories Saturday, February 24

Many described the global situation as unusually worrisome.

“In terms of scenario planning, the last few years has upped the ante,” said Ishaan Seth, Senior Partner at global consulting group McKinsey. “It is not about forecasting the future but it is about having a perspective on how the world may play out. The key is: How do you pivot an organisation quickly?”

An Alix Partners survey showed 68 per cent of CEOs report US-China tensions are causing them to adjust their strategy, while 66 per cent worry about the US presidential election.

“The (board level) concerns are geopolitics and elections around the world,” said BCG Global Chair Rich Lesser. “When there is so much uncertainty, CEOs and boards ask ‘What can I do to be better prepared,'” he added.

Some have been looking to diversify supply chains.

“Every Japanese company is seriously considering (changing) the origins of over reliance – it is so risky,” Takeshi Niinami, CEO of Suntory, Japan’s second-biggest domestic drinks group, told the Reuters Global Markets Forum.

“So we like to move to, for example, India or some other countries like Vietnam, but it can’t be done overnight.”

ABB Chairman Peter Voser said geopolitical risks, including China and Taiwan, were part of boardroom scenario planning.

“One takes steps to deal with it on a day-to-day basis, but also as a Plan B or C depending on what is going to happen,” said Voser, adding: “There should be no board in the world who takes this very lightly at this stage.”


Some bankers and CEOs were concerned about the potential for supply chain dislocations to reignite inflation. Most were upbeat about the US, but concerned about Europe and China.

“I will be cautiously optimistic,” said Srini Pallia, an executive at technology services and consulting company Wipro, adding: “People expected US to be in recession, now it’s a soft landing.”

The WEF meeting came as the global economy shows mediocre growth, while central banks hold interest rates high.

“Clients are cautiously optimistic. We are getting back to more of a normal environment. There is slower growth but sustainable growth,” Bank of America’s Chief Financial Officer Alastair Borthwick said.

The International Monetary Fund in October forecast that global GDP growth in 2024 would be 2.9 per cent, a dip from 2023’s 3 per cent. It cut its 2024 growth forecast for China, which has been hit by a property crisis, to 4.2 per cent and the Euro area to 1.2 per cent, but raised its US forecast to 1.5 per cent.


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