New Delhi, Aug 17 : A slowdown in global economic growth is expected for the remainder of 2022, as per the most recent version of the Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and Institute of Management Accountants (IMA).The latest report shows that confidence in the economy among accountants and finance professionals in North America has fallen back to levels that were seen at the peak of the Covid-19 pandemic in 2020.
The confidence level dropped in Asia Pacific (-20) and South Asia (-30), after an increase in the previous survey.
The fall in confidence as well as orders in the South Asia GECS were in with with that of the overall average for the period.In India the largest region’s economy central bank has increased rates of interest from 4 percent to 4.9 percent in May, as it struggles with inflation that is increasing to 7 percent.All across the region, the prices of important imports like food oils and fuels have risen dramatically in the aftermath of the conflict in Ukraine.The result of the outbreak and war will see an increase in the number of people who live in the extreme poverty range, according to the survey.
The Q2 Global Economic Conditions Survey (GECS) which was conducted in the middle of June — revealed an abrupt decline in the outlook for global economic growth.
Capturing the impact of geopolitical concerns and the increase in inflation across a large portion of the globe All the major global indicators declined in the Q2 survey.
The decline in confidence in the world is particularly severe, even though it is still above the low-point during the peak of the Covid-19 pandemic.
Indicators that are closely linked to economic activity, such as orders or employment, as well as capital spending are also down in Q2, but less than confidence.
The conclusion of this GECS is that, although the risk of an economic recession across the globe are increasing and the most likely outcome would be one of slow growth for the remainder of the year.
The largest drop in confidence was in the Middle East, a region that is more vulnerable to trade with Russia/Ukraine.
North America and Western Europe particularly saw large drops due to massive leaps in inflation in recent months.It is only in North America has confidence been restored to levels that were seen at the height of the economic uncertainty in 2020.
In other countries, the declines in confidence were not as dramatic however, they were less dramatic.
In the list of top risks following the Q1 survey financial professionals have traded concerns about Covid for concerns about inflation and increasing interest rates.
However, for the third GECS in the past supply chain and supply issues remain the top risk.I hope that this problem will decrease in significance as 2022 approaches.
While risks have increased however, there is a good chance that a recession in the global economy can be avoided.Although the outlook has gotten darker but the decline in confidence is more than the reported decline in orders.
Orders — a key indicator of economic activity are well above their long-term average.Employment index is significantly higher than its long-run average, despite falling in the second quarter of the year.
Employment markets are extremely tight, and the number of jobs is growing in several countries, offering some relief from the impact of the high inflation rate in real wages.
Although confidence among financial professionals has plummeted sharply however, the overall confidence level remains higher than the lowest-level that was recorded at the height of the Covid-19 pandemic the survey found.
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