Global executives are increasingly positive about the direction of the world economy, according to a survey conducted by global consulting firm McKinsey. Interestingly though, the source of their optimism has shifted away from emerging markets and toward the developed world.
“Respondents say they no longer expect developing markets to lead global economic growth over the next decade. Instead, they expect developed markets – and an improving Europe in particular – to advance future growth,” the survey said.
Accordingly, expectations for Europe are high: “One-half of all respondents expect to see positive growth in the Eurozone in the last quarter of 2013, and one-third say the same for the year as a whole.”
Respondents also expect continued economic improvement in the United States. Those predicting stronger US growth in the second half of the year than in the first half outnumber those expecting a weaker second half by more than three to one.
But the overall sentiment is still somewhat reserved. “Still, policy concerns weigh on executives: 59 per cent say if the United States’ Federal Reserve begins tapering its bond purchases before the end of this year, global growth in 2014 will suffer,” McKinsey said.
Amid continued reports of slowing growth, volatile currency movements, and sociopolitical instability, executives in emerging markets are now gloomy over the state of their home economies. Forty-one percent say economic conditions in their countries are worse now than they were six months ago.
According to McKinsey, structural policy and regulatory reforms, greater consumer confidence, and greater social and political stability would do the most to encourage robust growth in those markets over the next two to three years.