NEW YORK and MONTVALE, NJ – Accountants and financial experts are more confident about the global economy than they have been since the second quarter of 2023. The latest Global Economic Conditions Survey (GECS) from ACCA (Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) recorded a moderate increase, confident of placing the index just above its historical average.
Adding in small increases in new orders and employment indices, both of which are slightly above their averages, a positive picture emerges of a gradual improvement in the economic outlook. However, there was a slight decline in the capital expenditure index, which remains below average.
Financial experts are more confident about the global economy than they have been since the second quarter of 2023.
Highlights and the full report are available at https://www.imanet.org/about-ima/gecs.
Fortunately, there was an increase in confidence in most regions. The increase in Asia-Pacific was the third largest on record and may reflect growing confidence in the resilience of the U.S. economy, signs of improvement in Chinese data and the overall global economy, and possibly increasing optimism that Japan is finally emerging from its economic crisis Decades-long crisis could emerge from the fight against deflation. The moderate increase in confidence in Western Europe also suggests that growth may begin to recover from the weakness of recent quarters.
ACCA chief economist Jonathan Ashworth said: “The survey suggests some improvement in global growth. However, while encouraging, it is not yet time to celebrate as the global economy faces many risks and challenges and is still expected to experience below-average growth in 2024. “In addition, the increased cost concerns suggest that major central banks should continue to take a very cautious approach to any monetary easing.”
“The continued improvement in confidence in North America and the rise in other indicators likely reflect growing optimism that the U.S. economy is on track for a 'soft landing' or perhaps no landing at all in 2024,” said Susie Duong, Senior director of research and thought leadership at IMA said. “That would clearly be welcome news for businesses, although it does mean we are likely to see less monetary easing from the Federal Reserve this year than investors expected a few months ago.”
Less positive is global concern over rising operating costs, although this remains below its peak in the third quarter of 2022. Interestingly, cost concerns eased again in the advanced economies of North America and Western Europe, but remained high by historical standards. In contrast, cost concerns increased significantly in Africa, Asia-Pacific and South Asia.
Additionally, responses from the Global Risks Survey section of the GECS Q1 2024 report show how the impact of economic uncertainty has been exacerbated by increasing geopolitical challenges and talent shortages. Respondents across sectors and regions said they are feeling the impact of talent retention risks, with many respondents describing the skills shortage as an epidemic. Cybersecurity is also seen as a significant threat, particularly as advances in generative AI make it increasingly easier and faster to carry out ransomware and other cybercrimes.
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