Resigned to a slowdown
The international business community is resigned to a global slowdown in the coming year. And a survey by the global body, the Association of Chartered Certified Accountants (ACCA), shows the majority of financial professionals agree with the view.
According to the largest survey of finance professionals to be undertaken by ACCA, the majority of respondents say they believe the global economy will slow in the coming year.
The report stresses that, while the economic situation is tough, the constant flow of depressing headlines may be making finance professionals even more pessimistic than conditions justify.
Three-quarters of the 2,873 professionals who took part in the Global Economic Conditions Survey say conditions have been deteriorating or stagnating.
Nearly half, (49 per cent) of respondents have lost confidence in the economic prospects of their own organisations, while a similar percentage (45 per cent) think their governments are not dealing correctly with current economic challenges, the survey shows.
ACCA says that it believes that much of the drop in confidence, especially in Europe and the Asia-Pacific, is down to a flow of bad news rather than economic fundamentals, which have deteriorated only slightly in the past three months.
'The weakening in demand and deteriorating access to finance reported by accounting professionals were not sharp enough to justify the strong negative sentiment which they expressed,' says Manos Schizas, senior policy adviser with ACCA and survey editor.
'But after taking into account the effects that fear for the future will have on their views, the evidence still points to falling economic activity in the developed nations and a sharp slowdown in emerging economies.'
The drop in confidence could be seen as a result of people waking up to trends that have accumulated for the past year or more, he says.
'Globally, demand has proven to be too weak to sustain reliable growth, investment refuses to pick up and inflation remains high.' Manos says. 'And on top of everything else, it's still unclear whether the sovereign debt crisis in Europe can be contained, or indeed what it will mean if it can not.'
Respondents in China and particularly Hong Kong have been affected by the deteriorating economic environment.
More than half (52 per cent on the mainland and 59 per cent in Hong Kong) report a loss of confidence in the prospects of their own organisations.