The great majority (96%) of UAE CEOs are confident in their industry’s growth, significantly outperforming both regional and global averages, according to KPMG Lower Gulf’s latest UAE CEO Outlook Report.
The report looked at the executives’ main predictions for the coming months and assessed their top priorities. It is based on a survey of 1,325 CEOs worldwide, of which 25 were based in the UAE and 75 in the Middle East; and focused on four themes: economic outlook and geopolitics, ESG, talent and technology.
“Our CEO Outlook Report reveals that local business leaders are significantly more confident about growth prospects than their global counterparts,” said Emilio Pera, Senior Partner, and CEO of KPMG Lower Gulf, commenting on the findings of the report. “AI adoption and ESG investments continue to remain priorities for CEOs, highlighting the importance of these investments in shaping future growth.”
Economic Outlook
The MENA region is entering a period of significant economic growth, supported by strategic investments. The region’s growth is expected to reach 2.8% in 2024 and 4.2% in 2025, driven by strong economic policies and initiatives aimed at fostering sustainable development and resilience.
88% of UAE CEOs expect an annual growth rate of 2.5% by 2027
KPMG’s report found that regional executives expect continued growth in the short and medium term. The survey found that 80% of CEOs in the Middle East expect their businesses to grow by more than 2.5% over the next three years. In the UAE, 72% of CEOs are confident about their company’s growth prospects, with 88% expecting an annual growth rate of 2.5% or more in the next three years.
ESG and sustainability
Around the world, companies and governments have been turning their focus towards ESG initiatives. Although a Bain & Company report claimed global CEOs interest in sustainability is dwindling, as new technologies take the spotlight. the KPMG survey seemed to suggest this is not the case in the Middle East.
The report also found that 56% of UAE CEOs expect to see returns on their ESG investments within the next three to five years.
However, executives do seem to be facing barriers in their journeys towards sustainability. 20% of local CEOs said the greatest barrier to achieving net zero or similar climate ambitions is the complexity of decarbonising supply chains, with 29% of CEOs in the Middle East being concerned about the lack of appropriate technology solutions, the report said.
Technology
Over half of UAE CEOs (52%) are prioritising generative AI as a top investment for 2024, the report found, stressing the region’s drive toward technological innovation. Chief executives in the Middle East (55%) and worldwide (64%) also expressed an interest in increasing their organizations’ AI spending.
One of the country’s most significant initiatives is the UAE Digital Economy Strategy, launched in April 2022, which aims to double the contribution of the digital economy to gross domestic product (GDP) from 9.7% to 19.4% in the next 10 years. Moreover, collaborations with Nasdaq giants like Microsoft and NVIDIA are also leaving a positive impact on the UAE’s economy, being expected to contribute 19.4% to the country’s GDP within the next decade.
Over half of UAE CEOs are prioritising AI investments
“The UAE’s ambitious technology vision, driven by advancements in AI, establishment of in-country cloud services and strategic partnerships with global tech giants, positions the nation as a leading hub for digital innovation, to significantly boost economic growth and foster a diversified, knowledge-based economy,” said Mohamad Majid, Partner – Advisory at KPMG Lower Gulf.
Overall, CEOs in the Middle East (59%) and globally (63%) anticipated a three to five-year return on investment (ROI) for generative AI, with 44% of UAE leaders expecting to see benefits in five years or more.
