In the Asia-Pacific region's developed nations, such as Japan and South Korea, executives are losing confidence in the short-term economic prospects of their respective countries and industries. The latest McKinsey Quarterly survey of global executives found that respondents from this region are the least confident about the economic prospects of their countries during the next six months and have lost the most confidence overall since January 2004. Several of these nations face slowing growth, as well as increasing competition from both China and India.

In general, the more than 9,300 businesspeople from 130 countries who participated in the Quarterly survey have a positive view of the economic prospects of their countries and industries, but a significantly less positive view than they had a year ago (Exhibit 1). Indeed, global confidence has fallen by 11 percent since our first survey, in January 2004. This slide is consistent with a recent World Bank report concluding that the global recovery has peaked.¹