Finance Professionals Warn of Persistent Risks in Global Economic Recovery

Katrin Maier
Anat Gerstein, Inc. (on behalf of ACCA)
(917) 478-2891

Kristy Skowronski
Stern + Associates (on behalf of IMA)
(908) 276-4344 x208

Largest Economic Survey of Financial Professionals Questions ‘Recovery Consensus’ 

New York and Montvale, N.J., – According to the latest survey of U.S. and international finance professionals and a review of the global economic recovery over the past five years, threats to long-term economic stability remain, and the recovery may be limited to a few “islands of financial stability.”

The ACCA/IMA Global Economic Conditions Survey (GECS) is the largest economic survey of professional accountants in the world, published by ACCA (Association of Chartered Certified Accountants) and IMA®(Institute of Management Accountants). 

Second Quarter Results in the US and Abroad
According to the Q2 report, there was a pronounced recovery in business confidence in North America, with the US emerging as one of the few markets in which a genuine recovery is still underway.

Overall, business confidence in the U.S. rose in spite of stagnating consumer demand and cash flow conditions, crossing into positive territory with its highest reading in the history of the GECS so far. Indeed, 32 percent of U.S. respondents reported confidence gains over the last three months, up from 25 percent in early 2014. Businesses’ new-found confidence was backed up by a rise in job creation and capital spending.

In contrast to the U.S., some of the global star performers of 2013, including the U.K. and Ireland, were losing business confidence during the second quarter of 2014 once again, pulling confidence at the global level down marginally. 

For businesses, the most notable change since early 2014 was a significant further easing of access to growth capital, prompting an increase in capacity building – both capital spending and new hires. High-tech sectors continued to lead the U.S. recovery, although retailers finally started to recover as well – a sign that consumer spending could rebound later in 2014. 

Flawed and Fragile Global Recovery
According to the five-year report, the financial crisis and global recession have fragmented into multiple unresolved issues – including damaged bank and government balance sheets, unconventional economic policies, political polarization and geopolitical tensions. These problems are, by and large, still present five years later, despite a growing “‘recovery consensus.”

The five-year review also highlights how, since mid-2012, business confidence gains have been much stronger in the financial sector than among the world’s small- and medium-sized enterprises (SMEs) and large corporations. While conceding the benefits of stronger banks on business investment, the survey warns of a growing imbalance fuelled primarily by central banks. 

“A recovery that is confined to the financial sector is not sustainable,” says report author Manos Schizas, Senior Economic Analyst at ACCA. “Policymakers need to start asking hard questions about what’s really underlying this in terms of consumer spending, business investment and leverage.”

ACCA and IMA have also called on policymakers to take stock of the impact of unconventional monetary policy by developed countries – particularly the unintended spillovers into emerging markets. 

“Emerging markets in Asia and Africa have had to contend with damaging flows of ‘hot money’ as a result of policies over which they had no choice. Institutionally, they are also much worse equipped to deal with the fallout than the countries that set the flows in motion,” said Raef Lawson, Ph.D., CMA, CPA, and IMA Vice President of Research and Policy. 

The findings for Q2 2014 illustrate just how quickly a recovery based on a buoyant financial sector can be reversed. GECS figures for large financials in the U.S. and Europe show that confidence retreated sharply in anticipation of tougher stress tests, rising interest rates and falling property prices, geopolitical risks, and the threat of tougher regulatory enforcement. 

Beginning Global Rebound in Investment 
The health check of the recovery has shown that businesses around the world have been holding back on long-overdue investment for years, while austerity-hit public sectors have often sacrificed public investment in order to maintain government consumption levels. The result has been a significant loss of productivity that will take years to reverse. ACCA and IMA believe, however, that a rebound in investment that began in 2013 will be the biggest economic story of 2014, shaping industries for years to come. Access to finance has recovered consistently in most regions and businesses are increasingly seeking growth capital, and where shortages of capital exist these are increasingly due to structural rather than cyclical factors.

About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants with 170,000 members and 436,000 students in 180 countries worldwide, helping them to develop successful careers in accounting and business, with the skills required by employers. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We work through a network of 91 offices and centers and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence. For more information, visit

About IMA® (Institute of Management Accountants)

IMA®, the association of accountants and financial professionals in business, is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant) program, continuing education, networking, and advocacy of the highest ethical business practices. IMA has a global network of more than 70,000 members in 120 countries and 300 professional and student chapters. Headquartered in Montvale, N.J., USA, IMA provides localized services through its four global regions: The Americas, Asia/Pacific, Europe and Middle East/Africa. For more information about IMA, please

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