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Global economic confidence falls sharply amid growing trade tensions


12 Oct 2018


Euro & Finance
Global Europe

The latest Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) released today has revealed confidence fell in the third quarter of 2018, its lowest since the beginning of 2016. News flow about trade tensions has greatly impacted on confidence within the world’s biggest economies – the US and China.

Highlights of the latest survey include the following:

  • While confidence fell by 20 points, it held up best in South Asia and Western Europe with falls of 2 and 6 points respectively.
  • But in both key regions of North America and Asia Pacific confidence fell by over 20 points; in Asia Pacific confidence is at its lowest since the start of 2016, in North America it is the lowest since the start of 2017.
  • Confidence in the Middle East and Africa also fell sharply by 35 and 22 points respectively.
  • Globally, 45 percent of businesses have considered a number of responses to a change in economic circumstances, such as cutting staff numbers or introducing a hiring freeze. Only 18 percent of businesses are considering increasing staffing levels – a drop by 2 percent in the last quarter.

ACCA’s head of business insights, Narayanan Vaidyanathan, says:

‘The world economy this year is on course for its strongest performance in seven years, boosted by a buoyant US.  Momentum going into 2019 will be positive but there are headwinds that will slow the pace of expansion as the year progresses. In the US the boost from tax cuts will fade and interest rates are likely to continue their gradual rise.

‘In China, growth is slowing down mainly as a result of recent monetary policy tightening introduced to slow credit growth. But the authorities may ease policy to support growth if trade tensions with the US escalate early next year. Policymakers appear to be finally recognizing recent rates of credit growth are unsustainable and a period of weaker economic growth is a price worth paying for a more secure financial system.

‘Prospects for the Eurozone remain positive; falling unemployment levels in many Eurozone countries is leading to higher wages, which is helping to support consumer spending., Meanwhile in the UK the economy is holding up well but Brexit uncertainty is extreme with less than six months before the due date for leaving the EU.’

Raef Lawson, Ph.D., CMA, CSCA, CPA, IMA vice president of research and policy, says:

‘Ten years after the collapse of Lehman Brothers, which marked the start of the deepest global downturn since the great depression, the risk of something similar occurring in the near future appears low.

‘There has been a sharp reduction in the amount of risky lending, including the sub-prime mortgages that triggered the crisis 10 years ago. The Dodd-Frank Act in the US and the creation of the Prudential Regulation Authority in the UK, as well as the Basel III regulations that require banks to hold more capital, have made banking sectors across the developed world much safer. And while there are worries about property prices rising too quickly in some countries, these concerns are mostly focused on relatively small economies such as Hong Kong and Australia.’

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. The report can be found on ACCA’s website.                            

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About ACCA

ACCA (the Association of Chartered Certified Accountants) 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.

ACCA is currently introducing major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here:

About IMA® (Institute of Management Accountants)

IMA®, named 2017 and 2018 Professional Body of the Year by The Accountant/International Accounting Bulletin, 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) program, 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 Headquartered in Montvale, N.J., USA, IMA provides localized services through its four global regions: The Americas, Asia/Pacific, Europe, and Middle East/India. For more information about IMA, please visit



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