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.
Confidence fell the most in North America and Asia Pacific – in North America confidence is the lowest since the start of 2017, in Asia Pacific it is at its lowest since the start of 2016. Confidence in the Middle East and Africa also fell sharply. However, confidence levels in South Asia and Europe did not fall as sharply,
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.’