Socialism: An Economic and Sociological Analysis Ludwig von Mises. Ludwig von Mises Institute, 2010.
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Global business confidence is on the up, but the global economic recovery could be seriously flawed, reveals new research from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) Global Economic Conditions Survey (GECS).
GECS, the largest regular economic survey of accountants in the world, gauges the views of ACCA and IMA finance professionals globally, using the hands-on experiences of accountants in industry and practice to provide a truly global perspective of the economic recovery. The first GECS edition for 2014 saw global business confidence nearly cross over into positive territory for the first time in five years. But in the Caribbean, GECS Q1 shows that both business confidence and economic sentiment deteriorated in early 2014.
Forty three per cent of respondents were optimistic about the state of their national economies, down from 45 per cent in late 2013. Over half (53 per cent) were pessimistic, up from 49 per cent previously. Only 14 per cent of respondents reported rising confidence in the prospects of their own organisations, down from 34 per cent in late 2013, while 39 per cent reported a loss of confidence, down from 48 per cent previously.
Emmanouil Schizas, ACCA’s senior economic analyst, said: “The shift in confidence is strongly supported by deteriorating fundamentals. Business opportunities in the region fell sharply for a second consecutive quarter, back to levels last seen in the third quarter of 2012. Investment opportunities also fell, and are now scarcer than at any time during the last three years.
“Cashflow and demand conditions tightened, although they remain close to average levels for 2013. Most importantly, a year-long trend towards increasing price and exchange rate stability was broken in early 2014, and the tentative recovery in access to growth capital was interrupted. As a result capacity building by businesses fell for a second consecutive quarter, to the lowest levels observed in the last three years.”
Brenda Lee Tang, head of ACCA Caribbean, commented: “The role of the profession in supporting economic growth is one ACCA is passionate about, so this 21st edition of GECS comes with some interesting findings about accountant’s perceptions regarding business confidence and economic recovery.
In this edition, it is worth noting that the Caribbean is not the only region to question the recovery—respondents in Central and Eastern Europe, Asia-Pacific and Africa have all slowly dropped out of the global recovery consensus over the least six months.”
Thirty per cent of respondents around the world were now more confident about the prospects of their organisations than they had been three months earlier, a figure unchanged since late 2013. On the other hand, 31 per cent reported a loss of confidence, down from 34 per cent in late 2013.
Additionally, more than half of the global GECS sample (58 per cent, up from 55 per cent in late 2013) were optimistic about the state of their national economies, reporting that recovery was underway or about to begin. The pessimists only made up 38 per cent of the sample, down from 42 per cent in the previous quarter. However, a closer look revealed a worrying picture for the global economic recovery.
Emmanouil Schizas added: “Despite the best business confidence readings since the GECS began in 2009, ACCA and IMA’s analysis of the influence of fundamentals on business confidence suggests that the economic recovery is flawed and has now become much more fragile.
“Since early 2013, global business confidence has become increasingly dependent on price and exchange rate stability. This trend is a sign of building financial turbulence, and has accelerated dramatically in early 2014. Financial stability is now a more significant contributor to business confidence than cash-flow and demand. Expectations of government spending and ratings of government policy also became more significant contributors in early 2014, suggesting that the recovery has been hollowed-out in early 2014 and is now over-dependent on policy.”
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