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Nader Haffar, Chairman, KPMG Middle East and South Asia, Chairman and CEO, KPMG Lower Gulf
Nader Haffar, Chairman, KPMG Middle East and South Asia, Chairman and CEO, KPMG Lower Gulf

Optimism is back in the economy as the UAE begins its next 50 years with 92 per cent of CEOs confident about the economy’s growth prospects

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Published: Tue 28 Dec 2021, 12:06 PM

Last updated: Tue 28 Dec 2021, 12:08 PM

The majority of CEOs of the largest businesses in the UAE remain confident in the local economy, with optimism reaching pre-pandemic levels. The KPMG 2021 CEO Outlook – UAE finds 92 per cent of CEOs are confident about the country’s growth prospects, compared with 82 per cent of their global counterparts. Similarly, 88 per cent of local business leaders are optimistic about their company’s growth.

According to the findings of the survey, the UAE business leaders believe inorganic strategies will be critical in driving their businesses forward over the next three years. Almost seven in 10, or 68 per cent of CEOs say they will primarily use mergers and acquisitions (M&A) — the focus for 36 per cent, strategic alliances with third parties, accounting for 20 per cent, and joint ventures, accounting for 12 per cent, to achieve this ambition. In addition, partnerships and industry collaboration will be important for driving digital innovation and acquiring technology capabilities.

The prospect of a stronger future is a result of the UAE government’s response to the pandemic, such as imposing an early lockdown, promoting the vaccination programme alongside spreading awareness, and government stimulus measures announced last year. These activities, collectively contributed to overcoming the crisis. Consequently, investor sentiment has increased due to the country’s recent progressive reforms, including new long-term visa schemes. The Expo 2020 Dubai is also expected to play a big role in driving economic growth this year and next, boosting tourism and foreign investment and contributing to an anticipated economic growth rate of 4.9 per cent in 2022.

The KPMG 2021 CEO Outlook – UAE provides an in-depth three-year outlook from chief executives of major organisations in the country on enterprise and economic growth. This latest research is part of the worldwide KPMG CEO Outlook series which offers a unique perspective on CEOs’ shifts in mindset on the Covid-19 pandemic and the way forward to post-pandemic recovery.

Commenting on the findings of the report, Nader Haffar, Chairman, KPMG Middle East and South Asia, Chairman and CEO, KPMG Lower Gulf, stated: “The UAE government has turned a potential crisis into an opportunity by tackling the pandemic head-on with resources, smart technology and encouraging the private sector with a raft of enabling measures. Thanks to this stable framework, CEOs are emerging stronger and more confident about the economy and their own organisations’ prospects for the future. They are also adopting a forward-thinking strategy towards shifting their resources to disruptive technology and increasingly pushing ESG issues up the business agenda.”

He further added that in order to thrive in a post-Covid landscape, CEO’s have to be plugged-in, people-first and purpose-led to drive profitability and long-term growth while also recognising the positive impact on the planet and society.

Some of the key findings the survey include:

Connecting ESG strategy with financial returns

As CEOs plan to devote significant capital to become more sustainable, it’s important their digital investments are plugged into their ESG needs. Almost nine in ten, or 88 per cent of UAE CEOs say their digital and ESG investments are inextricably linked.

Digital disruption moves up on the CEO agenda

Since the onset of the pandemic, new perceived risks to growth have emerged. The UAE-based business leaders identified disruptive technologies, which was the most significant, at 28 per cent of CEOs; climate change, at 16 per cent; operational risk and tax risk, both at 12 per cent as potential impediments.

Changing sentiment on the future of work

With people returning to places of work, CEOs are focusing more on flexibility rather than wholesale changes to office-based work. Only 8 per cent of UAE CEOs plan to downsize, or have already downsized their physical footprint or office space because of the pandemic and changing working habits.

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