Davos 2023: Here's what top CEOs are saying about a recession
DAVOS, Switzerland — At this year's World Economic Forum, talk about a recession among top business leaders was flowing as freely as the high-calorie Swiss desserts.
Yahoo Finance Live spoke with numerous leading CEOs to get their thoughts on the global economy, the Russia-Ukraine war, and the outlook for inflation. Here is what several big names in business had to say on the potential for a recession in the next year.
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A 'mild' and 'shallow' recession
Unilever CEO Alan Jope
"Well, the world is not flat," Jope told Yahoo Finance. "So we are very bullish on South Asia — not just India, by the way. Pakistan, India, Bangladesh [are] all doing very well. Southeast Asia, Vietnam, Indonesia, the Philippines, Thailand starting to come back strongly. We see an extraordinary ability to navigate uncertainty in Latin America. So far, the U.S. consumer has held up well. Europe is a more difficult space. So I think there will be parts of the world that go into recession this year."
Bank of America CEO Brian Moynihan
"Our research team has moved their recession outlook out a little later in this year into early next year," Moynihan stated. "That means that they actually have a positive number for GDP growth in the U.S. this year, slightly positive. And it'll be a mild recession, largely because of the stimulus and other things. Even though the Fed raised rates, you see the capacity of the American consumer to keep going."
EY Global Chairman & CEO Carmine Di Sibio
"I thought there was going to be complete pessimism everywhere," Di Sibio told Yahoo Finance. "I'm surprised that's not the case. I'm not saying there's a lot of optimism, but it's much more balanced. I think people are looking at that we will have some kind of downturn in the U.S. and Europe, and how long it'll last, will it be shallow? There's more of a sense that it's going to be short and shallow right now."
KPMG CEO Paul Knopp
"I do not think we're in a recession in the U.S.," Knopp stated. "I actually see some pillars of strength in the U.S. when it comes to innovation, technology. The Inflation Reduction Act, actually, also helped with respect to spending in the U.S."
"There's no doubt that there are challenges, too, when it comes to interest rates and inflation," Knopp added. "But I am personally optimistic that there may not be a recession or, if there is one, it'll be short and shallow."
'There's still more optimism here'
Cisco CEO Chuck Robbins
"I've met with lots of CEOs, I've met with a couple heads of state, I've met with the First Lady of Ukraine, met with [China's] Vice Premier Liu He," Robbins said. "It's funny because publicly in the press, everybody wants to talk about whether we're going into a recession or not."
"When we go into our meetings, we generally don't talk about that," he continued. "There's a lot of discussions around Ukraine. Obviously, there's a lot of discussion around geopolitical issues. There's a lot of discussions around inflation in general [and] the energy crisis. But I think, overall, I sense there's still more optimism here than what's sort of being portrayed relative to this fear of a recession."
Carlyle Co-Founder David Rubenstein
"The press that has been written about Davos suggests that people here think that we're going into a recession for sure, and things are pretty gloomy," Rubenstein said. "I don't really agree with that. The numbers that we have in our own companies at Carlyle don't suggest a recession is imminent. And we also think that the U.S. policy to get inflation down is probably working. And so I don't really think it's clear we're going to go into a recession in the third or fourth quarter."
'A lot of uncertainty'
HP CEO Enrique Lores
"I think it's hard to know what is going to happen," Lores told Yahoo Finance. "And clearly, I'm not an expert. What is true, though, is there are significant challenges when we look at the impact of inflation, the impact of the war, the increase of energy prices, the situation in China. Each of these things could drive for a recession. It's hard to know what will happen."
"For all of us, what is important is to focus on those things that we can control," Lores added. "I think this is where we, as CEOs, can add value. And in our case, it's really about managing our costs while we continue to invest in the growth areas to position ourselves in the right way for whenever the economy will revamp."
Williams-Sonoma CEO Laura Alber
"I think there's been a lot of conversation about what's happening," Alber said. "Honestly, it's a lot of uncertainty, and the debate about recession, no recession. And I was reflecting on that last night and thinking about the opportunity and the importance of thinking long-term and not thinking too short-term — preparing for whatever might come but building for the future."
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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