Recession is likely on the horizon: That’s a key takeaway from the latest Global Economic Conditions Survey (GECS) released last week. The survey, from IMA® (Institute of Management Accountants) and ACCA (the Association of Chartered Certified Accountants), found that the coronavirus pandemic led to global economic confidence dropping to the lowest levels on record in all regions during Q1 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 and at

The survey was conducted between February 28 and March 12, 2020, and since then, the pandemic has worsened in many other regions across the globe, including the United States. IMA and ACCA note that the Q1 GECS only begins to paint the picture of the global economic collapse brought on by the coronavirus. 

“In normal circumstances, economic conditions change little in the space of just a few weeks. But these are not normal circumstances. So, although global confidence and orders both fell significantly in the Q1 survey, they do not convey the true scale of the global economic contraction that is now in progress,” said Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy. “What is abundantly clear is that the global economy is heading into a recession, initially at least a severe one.” 

Overall, the report noted that global confidence fell to its lowest level on record – since the GECS was first conducted a decade ago – with big falls in all regions. The global orders index, which tends to be less volatile than confidence, also fell sharply but not to an all-time low. 

Continued Lawson, “There will inevitably be long-term economic consequences, although at this stage, much is conjecture. But what is certain is that the public finances in many countries will be in very large deficits this year. Once economies start to recover and temporary income support measures are removed, these deficits will shrink rapidly. But they will remain substantial and fiscal retrenchment will be necessary at some point. Given the nature of this crisis, it seems likely that this will be achieved more through higher taxation than through reduced public spending.” 

Among other findings in the report: 

  • Two of the most significant economic regions, Europe and the U.S., are among the most badly affected. One early measure of the scale of the economic impact is the ten-fold increase to 3.3 million in U.S. jobless claims recorded for the third week in March. 
  • In many countries, the scale of government intervention will resemble war-type conditions: huge state involvement funded mainly by increased borrowing. The fiscal cost will be very large indeed as public sector deficits and debt will soar; deficits in many cases will rise well into double digits as a percentage of GDP.
  • Global trade will fall sharply this year, possibly by as much as 20%. 

The report notes that a short-term hit to global GDP will almost certainly be greater than during the 2008/09 recession, which at its low point recorded global GDP falling at an annual rate of around 2.5%. Unlike that downturn, however, the 2020 coronavirus recession is truly global in nature with no region of any economic significance spared. 

“The economic damage in the coming months will be huge,” said Warner Johnston, head of ACCA USA. “But if appropriate policy action is taken, then conditions for recovery will be in place when the COVID-19 health crisis is substantially over. Once confidence is restored, then this recovery should gather momentum, even if it is initially rather patchy. For now, the focus of economic policy is on preventing the coronavirus pandemic from causing significant and permanent damage to the global economy.” 

Fieldwork for the Q1 2020 GECS attracted responses from 983 IMA and ACCA members around the world, including more than 100 CFOs. 

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