Key events
People’s hopes for their financial futures suffered a “massive collapse” worldwide over the past year, the latest annual survey from global communications firm Edelman has found.
Edelman’s 2023 Trust Barometer has found a year-over-year double-digit decline in the belief that their families will be better off in five years’ time, in half the countries surveyed.
In a sign of global pessimism over the state of the world, the report found:
Further, not one developed nation has over 36 percent of its people confident that their family will be better off in five years, and 24 of the 28 countries surveyed dropped to all-time lows in optimism including the U.S. (36 percent), the UK (23 percent), Germany (15 percent) and Japan (9 percent).
The report also found that business is the only global institution seen as competent and ethical.
Business now holds “a staggering “53-point lead over government in competence and is 30 points ahead on ethics, Edelman reports.
Edelman argues that “Trust is the ultimate currency”, with founder Richard Edelman insting that businesses must continue to lead on societal issues.
However, as writer Adam Lowenstein points out here, critics question whether the company follow its own advice about the importance of trust.
Adam points out:
The firm’s clients have ranged from ExxonMobil to the Saudi government and members of the Sackler family, the former owners of the opioid manufacturer Purdue Pharma.
Introduction: Gloom as Davos begins
Good morning from Davos, where world leaders, business chiefs and policymakers are gathered for the World Economic Forum.
Fears of a global downturn, the cost of living crisis, the threat of natural disasters and extreme weather events and the Ukraine war all loom over WEF.
Two-thirds of chief economists surveyed by WEF believe there is likely to be a global recession in 2023, with nearly one in five saying it is extremely likely to occur.
More than half expect inflation to be high in Europe this year, while there was unanimity that European growth will be weak in 2023. Over 90% of chief economists predicted economic growth in the United States would be weak.
Corporate leaders are also anxious, with 73% of CEOs around the world believe global economic growth will decline over the next 12-months. That’s the most pessimistic outlook since consultancy PwC started asking the question 12 years ago.
Bob Moritz, global chairman, PwC, pointed out last night that many CEOs have not managed in an era of high interest rates, with inflation, macroeconomic volatility and geopolitical conflict all major concerns for bosses.
Moritz says:
A volatile economy, decades-high inflation, and geopolitical conflict have contributed to a level of CEO pessimism not seen in over a decade.
But happily, CEOs are still looking to retain staff as the wrestle with a labour and skills shortages.
The theme of this year’s Annual Meeting is Cooperation in a Fragmented World, recognising the massive shifts since WEF’s last January meeting in 2020 (2022’s meeting took place in May).
The European Commission’s president, Ursula von der Leyen, will address Davos this morning, at 11.15am local time, and may touch on Europe’s concerns over the US Inflation Reduction Act. Europe is worried that the IRA, a sweeping tax, health and climate bill, could breach trade rules by, for example, providing tax credits for electric cars made in North America.
Von der Leyen will be followed by Chinese vice-premier Liu He, in his first appearance at the forum since 2018.
The US Treasury secretary, Janet Yellen, is scheduled to meet with Liu He in Switzerland tomorrow to discuss economic ties between the countries; a sign that Washington and Beijing are keen to improve ties.
Good Morning from #Davos where Europe & Ukraine are in spotlight: EU President von der Leyen & Polish President Duda among speakers on 1st full day of #wef23. In afternoon, showdown between German Econ & FinMin Habeck & Lindner, who will appear one after other, will be exciting. pic.twitter.com/ijGC0zjsdj
— Holger Zschaepitz (@Schuldensuehner) January 17, 2023
The agenda
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8.30am Davos / 7.30am UK: Panel on Philanthropy: a catalyst for protecting our planet, with John F Kerry, special presidential envoy for climate of the United States of America; Mark Carney, United Nations special envoy for climate action and finance
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8.30am Davos / 7.30am GMT: Mastering New Energy Economics session including Fatih Birol, executive director, International Energy Agency
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11:15am Davos / 10.15am GMT: Special address by Ursula Von Der Leyen, president of the European Commission
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11:45am Davos / 10.45am GMT: Special address by Liu He, vice-premier of China
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1.15pm Davos / 12.15pm GMT: Media briefing: 2023 Explained: chief economist briefing on state of world economy, with Gilles Moëc, chief economist, AXA; Raghuram G Rajan, Katherine Dusak Miller, distinguished service professor of finance, University of Chicago Booth School of Business, Nela Richardson, senior vice-president & chief economist, automatic data processing
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5.30pm Davos / 4.30pm GMT: A Conversation with Henry Kissinger: Historical Perspectives on War
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6.45pm Davos / 5.45pm UK: Press conference with Mykhailo Fedorov, vice-prime minister of Ukraine
