Economic confidence on the rise across globe, ACCA finds

Economic confidence is rising across the globe as clear signs of business improvement emerge, rising for the third executive quarter according to a new survey from ACCA. While its Q1 2023 Global Economic Conditions Survey (GECS) showed confidence was still lower than a year ago, the latest study showed continued improvement as “fears fade” over the prospects of a recession this year. ACCA said this was underlined by the two GECS “Fear’’ indices which reflect respondents' concerns that customers and/or suppliers may go out of business. Both of these improved on Q4 2022. It also noted that global confidence edged up for the third consecutive quarter “not only because cost concerns have eased, but also because worries about accessing finance and securing prompt payment have declined”. Nonetheless, it warned that with Central Banks still raising interest rates and the delayed effect of monetary policy tightening on the real economy, as well as recent challenges in the banking sector, it “may be premature to sound the all clear”. However, when asked how they planned to respond to the changing economic environment, the net balance of companies planning to increase investment in capital and staff rose on the quarter, as did the net balance of companies planning to increase job creation. Jamie Lyon, head of skills, sectors and technology at ACCA, said: “The global economy entered 2023 with more momentum than many had expected. Confidence has risen as business comes to terms with the fallout from the Russian-Ukraine war. “The economic climate has been helped by a faster-than-expected relaxation of China’s zero-Covid policies, and more normal energy prices in Europe, that should help to reduce headline inflation and may bring about a pause in Central Banks’ tightening of monetary policy, but there are still some downside risks that may prevail.” Loreal Jiles, vice president of research and thought leadership at IMA, added: “Looking at the change in the GECS Confidence Indices over the quarter, what stands out is the 30-point improvement in Confidence in Western Europe. However, this good news was not limited to Europe; Asia-Pacific, North America and South Asia also registered an improvement. This was a broad-based pick-up, with the exception of Africa and the Middle East.”