The latest Global Economic Conditions Survey (GECS), released in late January by IMA® (Institute of Management Accountants) and ACCA (the Association of Chartered Certified Accountants), found that global economic confidence bounced back in Q4 2019 to around its level in mid-2019, with a particularly strong improvement in North America.

While the global poll of 2,560 accountants reported a recovery in economic confidence in all key regions, it also found that global confidence is below its long-run average and forecasted continued modest expansion in the world economy in early 2020.

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 full report is available here

Overall, the report noted that the global orders index, which is less volatile than confidence, was little changed for the third quarter in a row, and global investment and employment indices also were relatively stable in Q4, close to long-run averages. The global inflation picture continues to point to subdued cost pressures, reflecting the effects of a slowdown in economic growth.

Noting the U.S. findings, Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy, said, “There are downside risks to the U.S. economy, the main one being a re-escalation of U.S.-China trade tensions. But on the upside, last year’s monetary easing by the Federal Reserve and many other central banks will support growth in the coming months. It is also a year in which we are encountering a U.S. presidential election, which often coincides with a buoyant economy. A global recession is very unlikely, but it will be another year of sluggish growth.”

The U.S. GECS confidence measure improved significantly in Q4 to its highest level since 2018 Q2. Progress in the trade negotiations with China and the third ¼ percentage point cut in the U.S. Federal Funds rate since July are likely to have been factors in improved sentiment. 

Added Lawson, “Many of the risks to the global economy in 2020 are the same as those in 2019. The good news is that trade tensions between the U.S. and China have diminished – at least for now.” Yet, he cautioned that recent geopolitical risks in the Middle East are now at the fore, centered on U.S.-Iran tensions. 

Warner Johnston, head of ACCA USA, said, “In 2019, the global economy expanded at close to 3%, the slowest rate since the financial crisis 10 years ago. The GECS foreshadowed this slowdown, which continued steadily throughout last year. Looking ahead, the GECS points to steady growth early this year, with no strong pick up but no global recession either. Many risks to the global economy in 2020 are the same as in 2019.” 

Fieldwork for the Q4 2019 GECS took place between November 22 and December 11, 2019, and attracted responses from 2,560 ACCA and IMA members around the world, including more than 200 CFOs. 

For more information on the Global Economic Conditions Survey, visit IMA's website.