The latest Global Economic Conditions Survey (GECS) released from IMA? (Institute of Management Accountants) and ACCA (the Association of Chartered Certified Accountants) found that global confidence improved significantly during the third quarter of 2020 amid persistent fears of a prolonged economic recovery due to the worldwide coronavirus pandemic.?

The GECS, 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, captured the true scale of the global recession caused by the response to the coronavirus pandemic. Check out the IMA website to read the full GECS report.??

The Q3 2020 survey, which features specific COVID-19-related questions, points to global recovery through the second half of 2020 after the unprecedented collapse in activity during the first half, and found increasing expectations that significant economic recovery will be pushed into 2021. However, there still are lingering economic woes, the largest during peacetime since the 1930s.?

Activity indicators covering orders, capital spending, and employment all bounced back to some degree from low points reached in the second quarter survey. The global orders balance recovered by nine points in the third quarter, signalling a modest turnround. Other measures, including concern that customers and suppliers may go out of business also improved slightly from extreme levels last time.??

?The nature and prolonged duration of the COVID-19 shock means that it is likely to result in permanent changes to the structure and potential growth rates of economies,? said Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy. ?Higher private sector savings may be one outcome: households and companies limit consumption and investment respectively as they remain cautious in the face of extreme uncertainty. This suggests that the public sector may have to run significant fiscal deficits for some time in order to support overall demand. For now, at least mounting public sector debt can be sustained since interest rates are exceptionally low.?? ? ? ? ? ??

The momentum of the current recovery is likely to fade towards the end of the year and into 2021. ?More generally, the continued prevalence of the virus means that social distancing rules and other containment measures will persist for the foreseeable future,? said Warner Johnston, head of ACCA USA. ?This will adversely affect consumer demand in particular areas. Most economic shocks do not result in permanent changes in economic behavior. But the COVID-19 shock is likely to be different: It already has lasted for the first three quarters of 2020 and will do so well into 2021. This, and the nature and scale of the economic impact, means that permanent changes to the structure of economies are inevitable.??

The report found that confidence in the third quarter recovered strongly to a 3?-year high as the deep gloom caused by lockdowns lifted in most regions; North America is the most optimistic, while South Asia has the greatest proportion of respondents not expecting recovery until next year.?

Further, expectations of substantial economic recovery have shifted decisively towards later in 2021 over the last three months, including above 50% in North America. Responses to this question highlight the realization that the economic damage caused by COVID-19 and associated restrictions will persist well into 2021.?

Additionally, the survey identified a clear regional pattern with the strongest access to finance in the developed markets of North America and Europe, and the weakest in emerging markets. This did not change between the June and September surveys.?

Fieldwork for the Q3 2020 GECS took place between August 25 and September 8, 2020, and attracted responses from 1,067 ACCA and IMA members around the world, including more than 100 CFOs. The COVID-19 questions elicited 789 responses.?