The Association of Chartered Certified Accountants and the Institute of Management Accountants reported Friday that global economic confidence reached its highest point in years, after strong growth beginning in early 2017.
The ACCA and IMA’s latest Global Economic Conditions Survey found economic confidence at its peak since the first GECS was released in the first quarter Q1 2009.
The latest survey showed confidence in North America rebounded strongly in the first quarter of this year, with 38 percent of the accountants polled feeling more upbeat about the future, compared with only 26 percent who felt less confident. While confidence improved in both the U.S. and Canada, the recovery in Canada was especially strong and confidence there is now at a record level.
“The outlook for the global economy is as good as it has been for some time,” said ACCA USA head Warner Johnston in a statement. “Recent tax cuts have provided a boost to confidence and will help to ensure that the economy grows by a decent 2.5 to 3 percent this year. With the economy doing well and the unemployment rate at a multiyear low, interest rates look set to rise. But with inflationary pressures relatively weak, rate increases are likely to be gradual.”
The confidence boost in the U.S., which is at its highest point since the first quarter of 2017, follows passage of the Tax Cuts and Jobs Act last December. Confidence also reached a high point by the historical standards of the survey, with the proportion of respondents expressing more confidence about the future 10 percentage points higher than those who felt less confident.
However, there could be some problems ahead, with the U.S. and China planning tariffs on each other’s goods.
“Since the start of the year, policymaking in the U.S. has taken a more protectionist turn, causing concern about a possible trade war with China,” stated IMA vice president of research and policy and professor-in-residence Raef Lawson. “It is possible that this response by China could escalate the crisis as the U.S. government is no longer willing to abide large imbalances in trade cause by unfair trade policies.”
Some economic concern remain, however, among the accountants polled. As in some of the previous surveys, the top concern was increased costs (cited by 54 percent of the respondents), followed by falling income (36 percent), worries about customers going out of business (21 percent), and suppliers going out of business (9 percent).
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