Business confidence has risen sharply during the past 12 months, a global survey of chief executives has revealed, with fears of an impending economic downturn easing across every continent as private equity investments and company revenues at last begin to inch tentatively upward.

But the twin fears of climate and conflict mean that the corporate pessimism of the past few years is still lingering, with a quarter of those polled admitting they’re still expecting an imminent worldwide recession.

While that figure is worryingly high, it’s down 40 percent in just a year.

The ‘Global Pulse’ is an annual survey of 2,500 CEOs from 104 counties published by the world’s largest community of chief executives, the influential organization YPO, which has 450 chapters and more than 36,000 members. The group aims to improve businesses and communities through better collaboration and knowledge sharing between leaders.

South Asia surging

The cautious optimism evident in its latest confidence index confirms a trend that started over a year ago as global gross domestic product (GDP) growth returns to pre-pandemic levels and faith in national economies is partially restored. That’s despite almost two-thirds of respondents expecting the elevated inflation levels plaguing multiple economies to either remain the same or worsen.

Perhaps the most striking finding is the stark differences in outlook between continents, with South Asia seeing by far the biggest surges in enthusiasm across a number of matrices. The region, which includes India, Pakistan, Bangladesh and Sri Lanka, is home to over two billion people and boasts a GDP of US$4.48 trillion, making it an economic powerhouse, albeit one with comparatively low average earnings.

The World Bank’s October 2024 ‘South Asia Development Update’ reported that South Asia will remain the fastest-growing emerging market, with untapped potential that could boost productivity and create jobs, particularly if more women enter the workforce. Hence why so many YPO members there are becoming excited about its prospects.

The survey posed a number of questions about recent business performance and asked for predictions about the year ahead. It then ranked each region based on the responses.

Renewed confidence

These were the top three regions in the survey that:

 Don’t foresee a recession in the next year

South Asia 80%
Europe 60%
South-East Asia 60%

Are faring better than six months ago

South Asia 56%
Africa 45%
Middle East and North Africa 41%

Have experienced a sales increase of more than 5%

South Asia 48%
Latin America 36%
Africa 34%

Are expecting a sales increase in the next 12 months

South Asia 70%
Middle East and North Africa 66%
South-East Asia 64%

Are increasing their fixed investments in the next 12 months

South Asia 86%
Africa 78%
Australia and New Zealand 78%

Robust growth

South Asia also topped the tables for territories expecting rises in revenue and staff numbers this year and for belief in the strength of their economies.

Such optimism is justified, according to YPO member Vikram Gandhi, a former Vice Chairman of Investment Banking at Credit Suisse and Founder of the Global Leaders Circle at Harvard. He points to robust growth driven by soaring consumer demand and burgeoning foreign investment in the region, coupled with rapid digital transformation.

“It’s also a hub for technological innovation in sectors like renewable energy and financial services,” he tells The CEO Magazine. “Businesses are becoming more resilient, more sustainable and more aligned with global ESG expectations.”

He cautions, however, that geopolitical tensions and commitments to reach net zero carbon emissions mean the next few years won’t be without their challenges, particularly in India.

“It has a large and youthful population and there’s a danger of economic instability if job creation doesn’t keep pace with it,” he says.

“To tackle this, CEOs must invest in skilling and reskilling initiatives to ensure their workforces are prepared for the demands of a fast-evolving economy.”

Vast opportunity

It’s a view shared by fellow YPO member Sonal Agrawal, Managing Partner of Accord Group India and Global Chair of executive search consultants AltoPartners. She credits part of the economic buoyancy to three decades of intensive reforms by successive Indian governments, which have expanded household consumption, strengthened infrastructure and encouraged private sector investment in energy transition, manufacturing, mining and construction.

“South Asia is home to a fifth of the world’s population and over half of them are on the internet, so the optimism is driven by the sheer size of the opportunity,” she says.

But even the prospect of substantial investment in infrastructure and digitalization by both governments and venture capitalists might not be enough to mitigate what is becoming the region’s biggest challenge.

“South Asia will be critical to the global effort to slow climate change, but none of the countries are prepared to take the lead in inspiring the others to accelerate their efforts,” Agrawal warns.

“India has made a net zero pledge for 2070, but it’s also emphasized that the primary responsibility for emissions reduction lies with the developed world and that poorer countries must have the opportunity to alleviate poverty and catch up.”

If such sentiments start to cast doubt on the commitments within the Paris Agreement, there’s a danger of a ripple effect to other regions. But for now, India is still pledging to meet its ambitious targets.

Strong leadership

While South Asian CEOs reported the biggest jump in confidence, the rest of the world – particularly North America and Africa – wasn’t far behind in agreeing that the chances of an economic collapse have receded.

Consultancy giant EY’s Global Entrepreneurship Leader, Stasia Mitchell, believes the findings are powerful evidence that leadership has a role in influencing the journey ahead, and that there’s an opportunity to reframe the future.

“The latest ‘YPO Global Pulse’ report brings a wave of optimism,” she said. “It reflects the resilience and tenacity of entrepreneurs and leaders worldwide. At the heart of these findings is a powerful reminder: when we come together, support one another and keep pushing forward, we create opportunities to transform challenges into meaningful impact.

“Let’s harness this momentum, continue to build and make the most of this pivotal moment.”