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Global Economy Set for Weak Growth as Confidence Drops

By Nancy Fass
August 1, 2022

Weak worldwide economic growth looks likely for the rest of 2022, and economic confidence among finance professionals and accountants in North America has fallen back to levels seen during the height of the COVID-19 pandemic in 2020, according to the latest edition of the Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants).

 

The Q2 GECS, which was conducted in mid-June, points to a decisive deterioration in the global economic outlook due to the effects of the war in Ukraine and the surge in inflation across much of the world. But while risks have risen, indications are that a global recession will be avoided.

 

The largest fall in confidence occurred in the Middle East, a region more exposed to trade with Russia/Ukraine, while North America and Western Europe recorded especially large falls due to big jumps in inflation in recent months. The global confidence level remains above the low point reached at the height of the COVID-19 pandemic.

 

“High inflation is resulting in falls in real disposable incomes putting downward pressure on private demand, especially household consumption,” said Loreal Jiles, vice president of research and thought leadership at IMA. “Prices of both food and energy are rising rapidly. The result is a cost-of-living crunch on low-income households in advanced economies and across virtually all low and middle-income countries, where these two categories account for a high share of spending.”

 

The report can be found at here.

 

Nancy Fass is a senior editor for IMA® (Institute of Management Accountants). She can be reached at nfass@imanet.org.
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