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Most Middle East CEOs expect regional economic growth to improve in the coming year

73% believe GenAI will significantly change the way their companies

Middle East CEOs are optimistic about revenue growth, but almost half of CEOs don’t believe their business will be economically viable a decade from now if they don’t transform in the face of technology disruption and climate change, a new report showed.

According to PwC’s 27th Annual CEO survey, capturing insights from 4,702 executives across 105 countries, 73 per cent of CEOs in the Middle East, and 81 per cent of GCC CEOs, expect regional economic growth to improve in the coming year, far outpacing their global counterparts (44 per cent). This has translated into 66 per cent of Middle East CEOs expecting significant increases in their revenues over the next three years, with 65 per cent of CEOs in the Middle East expecting to increase their headcount in 2024.

The survey has also revealed that geopolitical conflict, along with inflation, and cyber risks are the key threats topping regional CEO’s risk agendas.

However, massive and fast transformation continues as the region seeks to digitise, decarbonise, localise, privatise and modernise. Middle East CEOs recognise the transformation challenge ahead, with 48 per cent saying they don’t believe their company will be economically viable a decade from now if they don’t evolve.

In response, CEOs are reinventing their businesses, with more than half focussed on diversifying their products and services, and for two thirds, tech innovation is a priority area for the next three years.

Hani Ashkar, PwC Middle East senior partner, said: “The past year served as a transitional period for the global economy. Despite slower global growth rates, the Middle East has displayed resilience, as countries have accelerated digital transformation and strengthened their non-oil sectors, creating employment opportunities. Businesses in the Middle East are proactively evolving through advanced technologies, including GenAI, and displaying a greater awareness of issues, such as climate change. This indicates significant confidence and a commitment to reshaping our region for sustained outcomes.”

The launch of advanced large language models, such as Falcon and Jais in the UAE, position the Middle East at the forefront of developing and harnessing Generative AI and regional CEOs are embracing the technology. 73 per cent of CEOs in the region believe GenAI will significantly change the way their company creates, delivers and captures value in the next three years. A quarter of the regional CEOs expect that GenAI will result in job creation in the next 12 months, 77 per cent believe that it will improve work efficiency and 63 per cent anticipate increased revenue on the back of its adoption. 38 per cent of our CEOs believe embracing GenAI will give them a significant competitive edge and almost half indicated they have already changed their tech strategy to leverage its opportunities.

This year, regional leaders have expressed a renewed determination to address the climate crisis, with 36 per cent identifying climate change as a key driver for corporate change in the next three years. Regarding progress made on climate action, CEOs in the Middle East are broadly on par with their global peers. 67 per cent of leaders indicated that their companies had energy efficiency programmes that were underway or completed. Meanwhile, just over half said they were innovating new climate-friendly products or services. CEOs identified inadequate returns on climate-friendly investments, complexities in regulations and inadequate demand from stakeholders as some of the biggest challenges to decarbonise.

Stephen Anderson, Middle East Strategy Leader at PwC Middle East, added: “Our survey results clearly indicate that leaders in our region are projecting greater optimism and confidence. CEOs must take advantage of emerging opportunities as they reinvent themselves with transformative technologies. As the world transitions towards clean energy, the Middle East will play an important role and it will be crucial to see how businesses lead the charge against climate change in a post-COP28 world.”