The new report indicates that economic confidence among finance professionals and accountants in
Fall in confidence and orders in the South Asia GECS were broadly in line with the global average for the quarter. In India, the region's largest economy, the central bank has raised interest rates from 4 per cent to 4.9 per cent since May as it grapples with inflation which is rising toward 7 per cent. Throughout the region, the price of key imports such as fuels and edible oils have increased sharply in the wake of the war in Ukraine. The survey said that the aftermath of the pandemic and war would be a significant increase in the numbers living in extreme poverty.
The Q2 Global Economic Conditions Survey (GECS) — conducted in mid—June — pointed to a decisive deterioration in the global economic outlook.
Capturing the effects of geopolitical issues and the surge in inflation across much of the world, all the main global indicators fell in the Q2 survey. The drop in global confidence is especially sharp, although the level remains above the low point reached at the height of the Covid-19 pandemic.
Indicators more closely related to economic activity -- orders, employment and capital spending, also fell in Q2 but more modestly than confidence. The conclusion from this GECS is that, while the risks of a global recession have risen, the most likely outcome is one of weak growth for the rest of this year.
The most significant fall in confidence occurred in the
In a list of top concerns since the Q1 survey, financial professionals have swapped concerns over
But while risks have risen, indications are that a global recession will be avoided. While the outlook has darkened, the drop in confidence is much more significant than the reported drop in orders. Indeed orders — a lead indicator of economic activity — are above their long-run average. The employment index is also well above its long-run average, despite dropping in Q2. Jobs markets are tight, and employment is rising in many economies, providing some offset to the effects of high inflation on real incomes.
However, while confidence among financial professionals has dropped sharply, the survey said that the global confidence level remains above the low point reached at the height of the Covid-19 pandemic.