New ACCA and IMA Report: Global economic confidence plummets to lowest levels on record in Q1 2020

Taylor Fenske
Stern Strategy Group
(on behalf of IMA)
(908) 325-3866

Jeff Simmons
Anat Gerstein, Inc.
(on behalf of ACCA US)
(917) 673-0024

New York and Montvale, N.J., April 7, 2020 – The latest Global Economic Conditions Survey (GECS) released today from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management 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. ACCA and IMA 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.

“The global economy is heading into recession as private economic activity collapses due to an effective lockdown in many countries. If these conditions were to persist for three months or longer, then falls in output approaching 10% would be entirely possible,” said Warner Johnston, Head of ACCA USA. “Early data releases, such as US jobless claims and monthly activity surveys in the US, eurozone, and UK point to plunging levels of economic output. Emerging market economies face additional difficulties as a flight to quality among investors triggers capital outflows.”

Added 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, probably often double-digits as a percentage of Gross Domestic Product (GDP) and greater than reached during the 2008/09 financial crisis. 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.”

The coronavirus was beginning to spread to North America at the time of the Q1 2020 GECS survey. But many of the restrictive measures that cause economic contraction were not in place. The longest economic expansion in US history of over 10 years is coming to an abrupt end.

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.
  • Global equity prices are down by around 30% since the start of the year and corporate bond yields have risen sharply, both factors raising the cost of capital for companies.
  • Commodity prices have fallen sharply, especially for oil. Oil prices have collapsed by over 50% since the start of this year. Oil exporters will suffer a further significant hit to their economies as oil revenues collapse.
  • 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.

Some of the lost economic activity is likely to be recouped, for example, in delayed purchases of consumer durables such as televisions and white goods will eventually take place. But much will be permanently lost, including in the service sector, such as cancelled visits to hotels, bars, restaurants, and cinemas that are never regained.

“The economic damage in the coming months will be huge,” Johnston said. “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 took place between February 28, 2020 and March 12, 2020 and attracted responses from 983 ACCA and IMA members around the world, including more than 100 CFOs.

About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering 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.
ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here:

About IMA® (Institute of Management Accountants)
IMA®, named the 2017 and 2018 Professional Body of the Year by The Accountant/International Accounting Bulletin, 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) and CSCA® (Certified in Strategy and Competitive Analysis) programs, continuing education, networking and advocacy of the highest ethical business practices. IMA has a global network of more than 125,000 members in 150 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/India. For more information about IMA, please visit