The latest Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants) finds that global economic confidence is at its highest level in years, with strong growth since the start of 2017. Economic confidence is at its highest since the first GECS survey was issued assessing Q1 2009. GECS is the largest regular economic survey of accountants around the world, in terms of both the number of respondents and the range of economic variables it monitors.
Confidence in North America rebounded strongly in the first quarter of 2018, with 38% feeling more confident about the future, compared with just 26% who were less confident. Meanwhile, confidence in China fell again for a second successive quarter, it is still at the fourth highest level since 2009.
Economic confidence in Asia Pacific improved in the first quarter of the year and now stands at its second highest level on record. The Asia region is the most trade-dependent part of the global economy, and with exports continuing to grow strongly, it is no surprise that confidence remains high.
A number of countries in the region, including Thailand, Korea, Vietnam and Malaysia, are growing at, or close to multi-year highs. Confidence did however drop back in the region’s biggest economy, China, amid further signs that the authorities are, for the time being at least, prioritising financial stability over economic growth.
Narayanan Vaidyanathan, Head of Business Insights at ACCA says, “The outlook for the global economy is as good as it has been for some time. The continued rising confidence, led by North America, is also benefiting other key trading economies such as Africa and South Asia. Despite the political uncertainties caused by Brexit, confidence in the UK and Western Europe also remains strong.”
Raef Lawson, Vice President of research and policy of Institute of Management Accountants, cautions that the biggest risk to the overall outlook is the possibility of a trade war between the United States and China, given proposed measures including tariffs, which could escalate tension and impact other regions globally. If this does not occur, the global economy likely would see another year of strong growth.
Fieldwork for the Q1 2018 GECS took place between 27 February and 15 March 2018 and attracted 1,418 responses from ACCA and IMA members around the world, including more than 100 CFOs.