Professional accountants are more confident about the Asian economy but are less positive when it comes to China’s growth, according to the latest Global Economic Conditions Survey (GECS) Report from ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants).
The report is based on 1,418 responses from ACCA and IMA members around the world, including those from more than 100 CFOs.
Economic confidence is at its highest since the first GECS survey was issued assessing Q1 2009, said ACCA.
Confidence in South Asia was the second highest in the world after North America, ACCA pointed out.
“India’s economy has recovered strongly from the disruption caused by the introduction of the Goods and Service Tax and the government’s demonetization campaign, and is likely to grow strongly over the next year or so on the back of buoyant private consumption and a loosening of fiscal policy ahead of general elections due next year,” the association said in the report.
Economic confidence in Asia Pacific improved in Q1 of the year, the second highest level on record, according to the report.
The region is the most trade-dependent part of the global economy, and with exports continuing to grow strongly, it is no surprise that confidence remains high, the report adds.
“There’s a strong improvement in the government-spending sub-component, which reflects the strong fiscal position of most countries in the region,” said ACCA. “The capital expenditure sub-component was broadly stable, while the employment sub-component weakened slightly.”
Confidence in China lowest since Q1 of last year
However, economic confidence in China fell for the second consecutive quarter, now at its lowest since Q1 of last year.
Despite the drop, confidence in the country remains at an elevated level—the Q1 reading is still the fourth highest in the history of the survey, ACCA noted.
“There’re also some encouraging signs that the authorities start to prioritize the long-term health of the financial sector over short-term growth,” said the association. “Credit has continued to weaken, which if sustained should help to reduce risks in the banking system.”
While trade war with the US remains a key concern in terms of China’s growth, the measures that the US has announced so far will have leave a small impact on China’s export sector.