New ACCA and IMA Survey on Global Economy Finds Fragile Confidence in Early 2021

Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy

Dubai: The latest Global Economic Conditions Survey (GECS) released today from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) found that global confidence in the fourth quarter of 2020 stalled and remains fragile at the start of 2021.

The GECS, the largest regular economic survey of more than 3,000 senior accountants and finance professionals from around the world, captured the true scale of the global recession caused by the response to the coronavirus pandemic, noting that global economic prospects have deteriorated since the survey was completed on December 8. The full report is available at 

The survey notes that the global economy contracted by around 4.5% in 2020, the biggest fall in global activity in several decades. Having recovered from lockdown-imposed weakness in the first half of the year, many economies again faced weakness as a second wave of COVID infections triggered renewed lockdowns. The survey envisions a steady recovery this year, but continued uncertainty limits the bounce in consumer and busines confidence, with pre-crisis output not being reached until mid-2022. The 2020 Q4 findings also reveal that:

  • Global orders, employment and capital investment indices recorded a further modest improvement, but still point to activity well below the pre-crisis level in the fourth quarter of 2019.
  • The “fear” indices—concern about customers and suppliers going out of business—edged lower in 2020 Q4 but remain elevated, clearly underlining the extreme uncertainty in the global economic outlook at the start of 2021. 
  • Inflation concerns remain negligible with concern about costs staying close to an all-time low.
  • The confidence measure fell back in North America, having surged in the prior third quarter. By contrast, there was a big improvement in Middle East confidence, buoyed probably by continued recovery in oil prices.
  • More than 50% of respondents in Asia Pacific, North America and South Asia expect sustainable recovery in the second half of this year.  

“Global Economic Conditions Survey (GECS) points to little change in confidence as there is great uncertainty about the path of economic growth this year,” said Hanadi Khalife, senior director, MEA, India, and Africa operations at IMA. “The survey shows that the global economy is in a fragile state at the start of 2021. However emerging markets are set for modest recovery this year. What is heartening is that 50% of respondents in Asia-Pacific, North America and South Asia said they expect sustainable recovery in the second half of this year. The most optimistic in this respect is the Middle East, where 54% expect recovery during the first half of the year. But much of this depends on the evolution of the COVID virus and variants relative to the progress of vaccination programs.”

Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy, said, “The pandemic has forced millions into extreme poverty as emerging markets suffered recession for the first time in decades last year. Policy responses to the pandemic have left the public finances of most economies in a perilous state with budget deficits in the range of 10% to 15% of GDP in many countries with debt to GDP ratios well over 100%.”

He added, “All this presents a big test for policy makers in terms of when to withdraw policy support and when policy should be tightened to rebuild public finances. Policy mistakes would risk derailing economic recovery.’

Fazeela Gopalani, Head of Middle East at ACCA, added, “Last year was the worst for the global economy for several decades, but despite this bleak backdrop, the Middle East has seen a big jump in confidence in Q4. We were the most optimistic region with 54% expecting to see recovery in the first half of this year. This could be due to the combined effects of an easing in geopolitical tensions and continued recovery in oil prices and demand. Oil prices jumped by around 25% to $50 per barrel in the last few months of 2020.”

She added, “However, activity indicators remain relatively weak, reflecting continued Covid-19 related restrictions on domestic activity. Recovery could gain momentum in the second half of the year, depending on the evolution of the COVID virus and progression with the vaccination roll-out.”

Michael Taylor, Chief Economist at ACCA, noted that since polling concluded in December, many countries have witnessed increased COVID-19 infection rates, prompting governments to re-impose restrictions, including national lockdowns. This means that global economic prospects early in 2021 have deteriorated since the Q4 survey. At the same time, there has been progress on the approval of vaccines, raising hopes of a permanent improvement in economic conditions later this year. However, unemployment rates will rise in many countries, potentially undermining consumer confidence and limiting the strength of a rebound. 

Middle East region

The Middle East region recorded a big jump in confidence in Q4, possibly due to the combined effects of an easing in geopolitical tensions and continued recovery in oil prices and demand. Oil prices jumped by around 25% to $50 per barrel between September and December. But activity indicators remain relatively weak, reflecting continued COVID-19-related restrictions on domestic activity and in many cases fiscal limits caused by relatively low oil prices (low relative to those on which budget assumptions were made).

“There are significant risks to the outlook for the year ahead,” Lawson said. “Much depends on the evolution of the COVID virus and variants, rates of infection and the speed and effectiveness of vaccination programs. The central case is economic weakness early on in 2021 as the virus dominates, followed by recovery gathering momentum later in the year as vaccination takes effect. There are significant risks surrounding the timing of these developments. In addition, the emergence of vaccine- resistant variants of the COVID virus, unexpected adverse side effects from vaccination and low vaccine take up are also health-related risks that could cause deviations in the recovery path.”

Fieldwork for the 2020 Q4 survey took place between November 20 and December 8, 2020, and attracted 3086 responses from ACCA and IMA members, including over 300 CFOs.

About IMA® (Institute of Management Accountants):

IMA® is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant) and CSCA® (Certified in Strategy and Competitive Analysis) programs, continuing education, networking, and advocacy of the highest ethical business practices. Twice named Professional Body of the Year by The Accountant/International Accounting Bulletin, IMA has a global network of more than 125,000 members in 150 countries and 300 professional and student chapters. Headquartered in Montvale, N.J., USA, IMA provides localized services through its four global regions: The Americas, Asia/Pacific, Europe and Middle East/India.

About ACCA:

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. 

ACCA supports its 227,000 members and 544,000 students (including affiliates) in 176 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability.