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Global economic confidence at a record low: pessimism ends a turbulent 2018

Update: January, 24/2019 - 14:00
A chart showing the change in confidence between Q3 an Q4 2018. — VNS Photo
Viet Nam News

HÀ NỘI — Global economic confidence fell for the third consecutive quarter in Q4 2018 to end the year at an all-time low, found the latest edition of Global Economic Conditions (GECS).

The global poll of 3,800 accountants, jointly conducted by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), shows that all key regions recorded a negative confidence score with signs of growth weakening in the world’s three biggest economies – the US, China and the Eurozone.

The survey reveals respondents to be pessimistic about the outlook ahead, with the lowest scores recorded in Western Europe and the Caribbean. The least pessimistic part of the global economy was again South Asia, followed by Africa and North America.

The GECS Q4 shows that the biggest concern for respondents was again rising costs, with 55 per cent citing this as an issue; 47 per cent of respondents globally are considering laying off staff, with just 18 per cent considering taking on new workers. Thirty nine per cent are considering scaling back investment in new projects, compared with just 16 per cent who are looking to increase investment.

The possibility of suppliers going out of business was a concern for just 12 per cent of respondents – unchanged from Q3.

Narayanan Vaidyanathan, head of business insights at ACCA, said global economic confidence over the year had been turbulent, with end-of-calendar-year results down compared to the start of 2018.

“It’s been interesting to look back at the GECS from the start of 2018, when we recorded economic confidence at its highest since the first survey was issued assessing Q1 2009,” he said. “Last year was clearly a roller-coaster ride and the outlook for 2019 is also uncertain.”

Raef Lawson, IMA vice president of research and policy, added: “The US’ economic confidence is now at an all-time low with signs that domestic demand is starting to slow, owing to a combination of higher interest rates and the waning impact of the recent fiscal stimulus. But the jobs market remains extremely buoyant which will underpin robust consumer spending in coming months. Despite this, we do not envisage a recession in the States despite confidence declining and trade tensions with China continuing. Looking ahead, we believe that global growth will hold up above 3 per cent this year.”

Fieldwork for the Q4 survey took place between November 23 and December 7, 2018 and attracted 3,773 responses from ACCA and IMA members around the world, including 302 CFOs.

ACCA is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

IMA is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant) programme, continuing education, networking and advocacy of the highest ethical business practices. IMA has a global network of more than 100,000 members in 140 countries and 300 professional and student chapters. — VNS

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