PwC: Thai CEOs show less confidence in economy, take cautious business approach

A new survey by PwC Thailand indicates a slight decline in confidence among Thai CEOs regarding the recovery of both the Thai and global economies compared to 2024. Consequently, they are adopting a cautious approach to business operations in 2025, leading to paused plans for increasing headcount, with over half having no plans to expand operations overseas.

Meanwhile, investment in generative AI (GenAI) and tackling climate change has become a primary focus for Thai CEOs, who anticipate that these areas will drive business reinvention of the future.

The 28th Annual Global CEO Survey - Thailand: Reinvention in Motion, by PwC Thailand, advises chief executive officers to pursue significant business reinvention to unlock new value.

PwC Thailand's CEO, Pisit Thangtanagul, remarked that confidence among Thai CEOs on the Thai and global economies has slightly declined. Some 44% believe the global economy will improve in 2025, marking a 1% drop from the previous year, while 51% expect an improvement in the domestic economy, also reflecting a 1% decrease.

In contrast, 27% of CEOs express high or very high confidence in their company's revenue for this year, with the figure rising to 44% for a three-year outlook. Additionally, 61% of Thai CEOs believe their businesses would not survive the next decade if they continued their current path, a decrease from 67% reported in the previous year.

"Thai CEOs are approaching strategy with more caution this year. Although they believe in their revenue growth and business capabilities, they're hesitant due to uncertainties in both the domestic and global economies.

"Various factors continue to dampen sentiments on investment and business expansion. However, many Thai CEOs are reinventing their businesses to ensure survival. Over the past year, we've observed businesses becoming more aware of AI and climate change issues. They're also exploring new ways to create value, with a greater emphasis on generating revenue from their core business," Pisit said.

The Thailand report, part of the PwC's 28th Annual Global CEO Survey, surveyed 4,701 chief executive officers (CEOs), including 41 from Thailand, between 1 October to 8 November 2024.

Regarding the top concerns for Thai CEOs, macroeconomic volatility and cyber risks lead the list, each cited by 24% of the respondents. These are followed by inflation and technology disruption, both identified by 20% of Thai CEOs. Additionally, the lower availability of workers with key skills and climate change are each highlighted by 15% as significant factors impacting business operations.

Thai CEOs continue to exercise caution in their business operations, as reflected in the decline in headcount plans. Only 29% intend to increase their workforce over the next 12 months-a decrease from 33% in the previous year, and notably lower than the global and Asia Pacific averages of 42% and 46%, respectively. Furthermore, more than half of Thai CEOs (56%) do not plan to invest in overseas operations in the coming year, and 41% have no plans to engage in major mergers and acquisitions (M&A) in the next three years.

"CEOs are entering 2025 with cautious optimism, which serves as a stark reminder that swift action is essential to thrive in this challenging environment. They must act boldly to reinvent their businesses and unlock new ways to create, deliver, and capture value" Pisit said. Two defining issues: GenAI and climate change

Over the past year, Thai CEOs have increasingly leveraged the power of GenAI in business operations. As a result, 30% reported an increase in revenue, 37% observed enhanced profitability, and 20% noted workforce expansion. This marks a shift from 2024, when 33% of Thai CEOs expected a reduction in headcount.

Despite these positive outcomes, 27% of Thai CEOs expressed little or no trust in AI, reflecting ongoing challenges in implementing AI technologies effectively.

Meanwhile, Thai CEOs continue to prioritise environmental issues as business leaders increasingly recognise market opportunities and the growing consumer demand for sustainable products and services.

Some 76% have undertaken climate-friendly investments over the past year. Additionally, 37% are willing to accept lower returns on climate-friendly investments compared to the minimum acceptable returns for other business ventures. However, only 22% of Thai CEOs have reported increased revenue from integrating environmentally friendly initiatives into their business strategies.

"The impact of digital transformation, climate change, emerging technologies, and other megatrends is intensifying the need for global business leaders- including those in Thailand-to adapt their approaches to value creation.

"They must align with evolving expectations from customers, the workforce, and other stakeholders. Additionally, responsible AI practices must be embedded across all aspects of business strategies. While this may not yield immediate returns in some cases, it is crucial for achieving long-term, sustainable success," he said.