CEO confidence in the global economy has hit a five-year low, according to the KPMG 2025 Global CEO Outlook, as corporate leaders focus strategic investments in AI, talent and risk resilience to sustain and fuel future growth.
The annual survey of more than 1,300 global leaders reveals a cautious outlook among CEOs, driven by persistent geopolitical tensions and economic uncertainty.
The challenging landscape is prompting a shift in leadership approach, with many adapting their growth strategies to navigate today’s complex world. 68% of CEOs are confident in the current trajectory of the world economy – down from 72% last year and continuing a long-term trend of declining confidence.
Navigating uncertainty. CEOs are adapting and moving forward
Despite the headwinds, cautious optimism persists, with a significant majority of leaders focusing on investment in talent to drive a return to growth. 92% of CEOs say they’re planning to increase headcount over the next 12 months, while many remain upbeat on healthy earnings growth and remain keen on M&A. 40% forecast earnings increases of more than 2.5% in the coming twelve months, while 89% are predicting merger or acquisition activity. Their biggest potential roadblocks to achieving growth remain relatively unchanged from last year, with cybercrime and cyber insecurity (79%), AI workforce readiness or upskilling of workforce on AI (77%) and success integration of AI into business processes (75%) continuing to loom large.
Economic and geopolitical turbulence is forcing CEOs to rethink their leadership and strategy. Most (72%) have already adapted their growth plans, but leaders remain divided on what specific capabilities are needed to respond to today’s fast-changing and unpredictable environment, with greater agility and faster decision making (26%) vying with transparency in communication (24%) and the ability to identify prioritize risks and manage risks (23%) for top priority.
Leaders prioritising human-centric AI deployment
CEOs, navigating a shifting economic landscape, are doubling down on AI and technological innovation. Nearly three quarters (71%) of leaders say AI is a top investment priority for 2026, with 69% planning to invest between 10 and 20% of their budgets to AI over the next 12 months.
However, an accelerated global adoption of AI is creating new challenges for the boardroom. CEOs express significant reservations regarding ethical implications (59%), data readiness (52%) and lack of regulation (50%). A clear consensus is emerging that robust governance frameworks will be critical for AI's sustained success.
CEOs also recognise the success of AI adoption depends on effective implementation and the prevailing sentiment is a commitment to a people-led deployment of new technology. While concerns persist that AI could lead to widespread job losses, 61% of CEOs say they are actively hiring new talent with AI and broader technology skills, while three quarters (70%) report concerns about competition for AI talent and 77% highlight workforce upskilling as a challenge, underscoring the intensifying race for talent.
Climate confidence on the rise
While attitudes toward ESG vary across regions, the KPMG 2025 CEO Outlook indicates that most corporate leaders remain strongly committed to their sustainability goals and increasingly confident of meeting them.
Notably, a majority (61%) of CEOs now express confidence in meeting their net-zero targets by 2030. This marked increase in confidence suggests a strengthening belief in the attainability of long-term climate ambitions within the corporate world.
Bill Thomas, KPMG’s Global Chairman and CEO, said: “It’s clear from our findings that CEOs are finding opportunities from disruption by investing boldly in technology, innovation and talent.
With what we are seeing, there’s a careful balance required between innovation and responsibility. CEO responses on AI exemplify this, with leaders recognizing the need to embrace innovation while managing concerns over ethics, regulation, upskilling and access to talent.
Ultimately, the leaders who can embrace market volatility and focus investments in the right strategic areas for their organization will be the ones best placed to unlock new opportunities and build sustainable, long-term growth.”
Christos V. Vasiliou, Managing Director, KPMG in Cyprus, commented: “The findings of this year’s report reflect a global landscape filled with both challenges and opportunities — and Cyprus is no exception. Local businesses are moving decisively towards digital transformation, strategically investing in technology, innovation, and human capital. The strong focus on AI, workforce upskilling, and sustainability targets reveals a new, more mature leadership mindset. Organisations that dare to invest with a clear vision and agility will be the ones shaping the future of the Cypriot economy”.
