World economic confidence drops in Q2 2019

KUALA LUMPUR: Global economic confidence dipped back in the second quarter this year, partially reversing the bounce seen for the first time in a year during the first quarter.

This is according to the latest Global Economic Conditions Survey (GECS), conducted by the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants.

The GECS concludes with a view of the outlook for global growth, which this year remains a slowdown, between 3 to 3.5 per cent from 3.8 per cent last year.

The good news is that persistent sub-target inflation, notably in the United States (US) and euro area, gives central banks an opportunity to ease monetary policy.

The global poll of 1,162 accountants shows that confidence remains above the record low reached at 2018-end, consistent with a modest global economic slowdown.

The global orders index, a leading indicator of activity, also fell in the second quarter and consistent with this view.

Significantly, global cost pressures eased again, with 45 per cent of respondents citing this as an issue, down from 55 per cent, a year ago.

ACCA chief economist, Michael Taylor said the GECS pointed to a slowing global economy with significant downside risks reflected in weak confidence.

“The biggest risk to the global economy remains a significant further escalation in the US-China trade war. A sharp slowdown in China and a no deal Brexit are additional downside risks.” – Bernama