Global survey of accountants points to China slowdown, countries’ lack of policy options | ACCA Global
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Finance professionals who responded to this survey were quite at ease with the prospect of austerity until mid-2010. Then the recovery failed to take off and everything changed. Relatively few believe their governments can make austerity work, even in countries such as Ireland where it has been executed quite successfully. Except this time there is a limit to what even countries with strong credit ratings and no liquidity constraints, such as the US and China, can do
—Manos Schizas, senior economic analyst, ACCA

Region still lags behind most of the world in terms of confidence

The global economic recovery has slowed down again in early 2012, according to a worldwide survey of finance professionals who fear that governments which are already living beyond their means may struggle to get it back on track through extra public spending.

The Global Economic Conditions Survey (GECS) for the second quarter of 2012, undertaken by ACCA (the Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants), cautioned that growth across the world's most developed economies has stalled once again and that the global economy is as fragile as it has ever been in the last three years. The global survey of 2,700 professional accountants, now well into its third year, suggests that hints of a stronger recovery in early 2012 were mostly down to misplaced optimism, and that most of the gains made at the time have since been reversed.

China’s slowing economy has dominated the survey findings this quarter, although ACCA and IMA stress that there are few signs of the hard landing many commentators had feared. That said, both confidence and investment are falling despite increasing business opportunities.

Survey editor Manos Schizas, senior economic analyst with ACCA said: 'The point now is to see how far and how fast the Chinese slowdown will travel. Our members in Africa tend to feel any fallout from Asia fairly quickly, and there could be implications for other markets which trade with China.'

According to the survey, the flip side of the Chinese slowdown is a recovery for the US economy, where investment is on the rise and confidence is high, despite significant potential problems.

With growth faltering once again, the finance professionals surveyed by ACCA and IMA are rethinking their attitudes towards public spending. However, the policy choice is not quite so simple. Accountants working in major markets such as the US, China, Russia, Malaysia, or Pakistan - economies relied on by others for trade and export opportunities - believe that fiscal stimulus by their governments is already unsustainable. It was in only a few markets that respondents believed that their governments could spend both robustly and sustainably – places such as Singapore, or the UAE.

Manos Schizas said: 'Finance professionals who responded to this survey were quite at ease with the prospect of austerity until mid-2010. Then the recovery failed to take off and everything changed. Relatively few believe their governments can make austerity work, even in countries such as Ireland where it has been executed quite successfully. Except this time there is a limit to what even countries with strong credit ratings and no liquidity constraints, such as the US and China, can do.'

Table 1: GECS Confidence index across regions and in selected markets

Much more confident

More confident

No change

Less confident

Much less confident

Index

Americas

4.9%

21.3%

41.0%

24.8%

8.0%

-6.6

Middle East

5.8%

22.2%

40.4%

22.8%

8.8%

-3.5

Asia Pacific

1.6%

12.6%

38.8%

36.1%

11.0%

-33.0

CEE

.6%

10.9%

51.9%

28.8%

7.7%

-25.0

South Asia

3.8%

17.0%

36.8%

32.1%

10.4%

-21.7

Western Europe

2.1%

13.8%

42.9%

29.8%

11.4%

-25.3

Africa

9.3%

24.3%

31.7%

27.3%

7.3%

-1.0

Australia

2.4%

14.3%

45.2%

28.6%

9.5%

-21.4

Canada

5.4%

9.5%

48.6%

29.7%

6.8%

-21.6

China ex HK

4.7%

17.4%

37.2%

36.0%

4.7%

-18.6

Cyprus

6.5%

39.1%

32.6%

21.7%

-47.8

Hong Kong

1.1%

1.1%

32.6%

48.3%

16.9%

-62.9

Ireland

1.6%

15.4%

43.4%

29.7%

9.9%

-22.5

Malaysia

.9%

11.0%

38.5%

37.6%

11.9%

-37.6

Mauritius

3.3%

13.1%

36.1%

41.0%

6.6%

-31.1

Pakistan

3.1%

14.1%

35.9%

34.4%

12.5%

-29.7

Russia

10.0%

55.0%

30.0%

5.0%

-25.0

Singapore

12.5%

43.8%

32.5%

11.3%

-31.3

UK

2.4%

13.2%

42.9%

31.1%

10.5%

-26.0

UAE

4.8%

30.2%

38.1%

19.0%

7.9%

7.9

USA

5.2%

24.4%

39.3%

23.0%

8.1%

-1.4

Total

3.7%

17.0%

40.6%

29.0%

9.7%

-17.9

Table 2: GECS Recovery index across regions and in selected markets

It's getting better

We are at the bottom and things will now start to improve

We are at the bottom and will remain there for a while yet

It's getting worse

Don't know

Index

Americas

24.1%

17.6%

33.9%

18.6%

5.8%

-10.7

Middle East

30.2%

16.3%

30.2%

17.4%

5.8%

-1.2

Asia Pacific

15.0%

10.0%

22.8%

42.4%

9.8%

-40.2

CEE

19.9%

6.4%

33.3%

32.7%

7.7%

-39.7

South Asia

24.5%

17.0%

27.4%

27.4%

3.8%

-13.2

Western Europe

6.7%

11.0%

45.0%

34.0%

3.2%

-61.4

Africa

26.2%

19.2%

20.2%

32.1%

2.3%

-7.0

Australia

7.1%

7.1%

45.2%

35.7%

4.8%

-66.7

Canada

28.4%

16.2%

25.7%

27.0%

2.7%

-8.1

China ex HK

24.1%

19.5%

16.1%

34.5%

5.7%

-6.9

Cyprus

2.2%

6.5%

28.3%

63.0%

-82.6

Hong Kong

8.9%

5.6%

21.1%

53.3%

11.1%

-60.0

Ireland

4.4%

15.9%

51.1%

24.2%

4.4%

-54.9

Malaysia

13.8%

4.6%

23.9%

45.0%

12.8%

-50.5

Mauritius

13.1%

13.1%

34.4%

37.7%

1.6%

-45.9

Pakistan

23.4%

15.6%

28.1%

29.7%

3.1%

-18.8

Russia

32.5%

2.5%

25.0%

30.0%

10.0%

-20.0

Singapore

13.8%

11.3%

20.0%

42.5%

12.5%

-37.5

UK

7.4%

9.9%

46.8%

32.5%

3.3%

-62.0

UAE

27.0%

19.0%

30.2%

17.5%

6.3%

-1.6

USA

25.7%

17.0%

36.2%

15.5%

5.6%

-9.1

Total

17.3%

13.6%

33.7%

30.1%

5.3%

-32.9

  • The full Global Economic Conditions report is available via the 'Related Links' section to the left of this article.