Fazeela Gopalani

Dubai (AETOSWire)
Global Economic Conditions Survey indicates confidence in the Middle East falling to its lowest level in a year.

A survey of more than 1,000 senior accountancy experts on economic conditions worldwide finds that global confidence in Q3 fell to its lowest level since 2011, with confidence in the Middle East falling to its lowest level in a year. 

The report Global Economic Conditions Survey (GECS), jointly published by ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) reveals that global employment and investment intentions also declined – pointing to a slowing world economy heading into 2020. 

For the Middle East, key messages from the survey reveal that oil prices declined slightly over the quarter. But a more dominant influence on oil prices is likely to be reduced demand as a result of a slowing global economy. 

Fazeela Gopalani, head of ACCA Middle East comments: ‘A positive development for those countries with a fixed exchange rate with the US dollar – such as Saudi Arabia, UAE, Oman, Bahrain and Qatar - is the cut in interest rates by the US Federal Reserve. 

‘The US cuts earlier this year were immediately followed by reductions of similar size in these countries. Lower interest rates should stimulate private sector credit growth and help to boost the non-oil private sector economy. The real estate sector, increasingly important in many economies in the region, will benefit especially from lower borrowing costs. Encouragingly, the region’s GECS index measuring problems accessing finance is close to a three-year low in Q3.’ 

Commenting on the global findings, Michael Taylor, chief economist at ACCA, warns that risks to the global economy have increased in recent months, saying: ‘The fall in confidence this quarter is not surprising, given the escalation in the US-China trade war, evidence of continued slowdown in China, increased geopolitical risks in the Middle East and the possibility of a no-deal Brexit. Growth in emerging markets, especially those heavily dependent on exports, is slowing. Global trade growth has softened even more than global economic growth over the last couple of years, hurting many emerging markets.’

He continues: ‘The good news is that reduced concerns about inflation, highlighted in the GECS, means that monetary policy is being eased. Significantly, the US Federal Reserve has already cut interest rates by half a percentage point and is likely to do more by year-end. Many other central banks have followed suit, improving monetary conditions in emerging markets. Easier monetary policy and buoyant jobs’ markets in many economies are the case for the global economy avoiding recession.”    

Fazeela Gopalani concludes: ‘Our GECS is now ten years old and over this time it has collected the views of accountants and finance professionals “at the coal face” – from those who are experiencing current economic conditions and who will be among the first to see any changes in trends.  This is what makes GECS so unique, proving its worth by demonstrating the profession’s ability to identify and anticipate changing economic trends. Over the next ten years there will no doubt be many twists and turns in the economic cycle and GECS will be there, tracking them.’


*Source: AETOSWire

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