Fast forward to this week’s World Economic Forum and the atmosphere could hardly have been more different.
“There’s not much optimism,” said Nelson Cunningham, lawyer and a former adviser to the Clinton administration who has been coming to Davos for 21 years. “But are we too pessimistic? I don’t know, I think the pessimism this year is warranted.”
“After two years of solid expansion, the world economy is growing more slowly than expected, and risks are rising,” IMF Managing Director Christine Lagarde said at a press conference in Davos on Monday.
She set the tone for the week.
“It’s the lack of certainty that is hurting,” said Cunningham. “If you are a CEO today, looking ahead to the next year — what are tax rates going to be like in a year? What is the US budget deficit going to be like? Will there be tariffs?”
Plenty to worry about
“We’ve seen the damaging effect on many of the companies, including Huawei, from the trade war,” said Ken Hu, Huawei’s deputy chairman.
Ning Gaoning, chairman of Chinese state-owned oil and gas company Sinopec, said that Chinese companies are likely to reduce investment in the United States. “They thought they are welcome to invest in another country, and now they realize they are not … welcome all the time,” he said.
Has the needle swung too far?
But some executives thought that there was too much pessimism in the corridors of the Davos congress center.
“Last year at this time, people were almost too bullish in 2018. Now when I talk to people, they are almost too cautious about 2019,” said Sewing.
American CEOs in particular should still be pretty optimistic.
“The underlining fundamentals, they are positive, they are strong, there are not many factors to point to that indicate that we are close to a recession in any way,” said Lynne Doughtie, CEO of KPMG in the United States.
And she worries about the danger of being too gloomy.
“We have to be careful that we don’t making this a self-fulfilling prophecy by the negativism when a lot of the underlining data would suggest that the elements of the US economy are strong,” she added.
Source : CNN