Accountants have welcomed a “buoyant” return to economic stability in Q2 2021, according to the latest edition of ACCA and IMA’s Global Economic Confidence Survey.
The survey found that over 1,100 global respondents reported an upturn in key global activity indicators, such as orders, which ACCA said was the “proxy for real economic activity”.
The biggest gain over the period was reported in North America, which was “powered ahead” by a massive US fiscal stimulus.
The two ‘fear’ indices, measured by concerns that customers and suppliers may go out of business, both declined in this latest survey, confirming that the “extreme uncertainty created by the Covid-19 crisis has fallen back towards more normal levels”.
Despite these findings, “stark warning signs” remain due to wide regional variations in confidence. Large increases across Europe contrasted with significant falls in Asia Pacific and South Asia, for example. As a result, ACCA and IMA ask governments and policymakers to “ensure this divergence does not grow”.
Michael Taylor, chief economist ACCA, said: “These changes reflect the speed at which vaccinations are taking place in Europe while increased Covid-19 infections are happening again in Asia Pacific and South Asia. A key theme of this GECS is the divergence in economic prospects between advanced and emerging market economies. This needs to be tackled urgently.”
Helen Brand, chief executive of ACCA, added: ‘The world economy’s recovery to its pre-pandemic size has been driven by rapid growth in the US and China, the two biggest economies. There are many jurisdictions with plenty of ground to still make up. But the difference we see between advanced and emerging markets is glaring – and action is needed on vaccines so that there are no shortages in emerging economies.”
In addition, Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy, noted that for 2021, global GDP growth is likely to approach 6%, what he calls an “exceptionally strong” rebound after the 3.5% fall last year.
This growth will reportedly be concentrated in advanced economies where levels of vaccination mean that social distancing restrictions can be relaxed.
Lawson said: “This is a global pandemic, which needs global action to safeguard the health of populations and their economies – in the short and long term. For IMA and ACCA, there is a clear link in doing this to the UN SDGs, specifically Goal 1 to end poverty everywhere and Goal 8 decent work and economic growth.”