CFOs view about risks to the global economy

For this edition of the CFO Survey, we listed 12 risks to the global economy and asked CFOs to rate the perceived likelihood that each of these will materialise (from extremely unlikely to extremely likely). They also rated the intensity of the risks’ impact, should they occur, on the financial prospects of their company (from no/very low to very high impact).

The responses we received shows that none of the stated events in the survey question qualifies as a major risk (defined as having both a high probability of occurring and a large impact on the companies if occurring) and CFOs do not appear to feel particularly under threat or at risk.

The events assessed as most likely to occur (“Rise in protectionism” and “Rise in polarization/populism”) are of a political nature and are expected to have relatively small impact on the CFOs’ own companies. A probable reason the “Rise in protectionism” event was singled out as particularly likely is the steel and aluminum tariffs enacted by the US while the survey was conducted, while the reason for “Rise in populism” standing out probably has more to do with the political winds in Europe lately.

Overall, Swedish CFOs are well aligned with the views of their EU peers. The average EU-based CFO lists the same three events on the top regarding likelihood, and a plunge in asset prices is also the event estimated to have the largest impact on their firms. However, for the average EU-based CFO, a new euro zone crisis is estimated to have a larger impact than for Swedish CFOs. Not surprising, given that Sweden was a peripheral country in the last crisis.

 

Note that we are showing the % of respondents answering that an event is somewhat/extremely likely and would have a high/very high impact.