21 October, 2016
– Business confidence in India rises higher than any other global region
-Confidence boosted by passage of goods and service and Urjit Patel appointment
-Global business confidence at 12 month high, fuelled by prospects of higher government spending across OECD
Improving confidence in North America and China driving global uplift in sentiment
Business confidence in India has risen for a third successive quarter, according to the latest the latest Global Economic Conditions Survey published today by ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants).
Global business confidence is at its highest in twelve-months, with OECD countries anticipating a rise in government spending, a four-year confidence high in China leading to an uplift in emerging markets and the US continuing a stable recovery
The survey has found that 38% of companies in South Asia are reporting improving conditions, with companies in India more likely than anywhere else to increase investments in capital projects.
Md. Sajid Khan, Head of international development at ACCA, said, “The passage of the Goods and Services Tax Bill in August has been an important sign that Prime Minister Modi will justify some of his claims of making India an easier place to do business in and trade with, which has improved sentiment. Coupled with this, the appointment of Mr Patel as central bank governor has offered global reassurance that India will continue on the successful path led by Raghuram Rajan in providing a stable economic foundation and low inflation.”
He added “Over 51 per cent of respondents expected government spending to rise, which has driven global business confidence to the highest point in over a year. After years of reduced investments in most Western economies, a combination of falling budget deficits and bond yields is encouraging governments to reach for their wallets. This is good news for business in a continued depressed climate for investment and hiring.”
Sajid Khan also notes that the upcoming US Presidential election could affect global trade. He mentioned “Given the global context—where record numbers of trade restrictions between nations have been reported by the World Trade Organisation—the outcome and response to November’s election could have major implications for global trade. With protectionist sentiments on the rise across many nations, the US presidential elections in November could have a significant impact on whether this improving confidence translates into genuine increases in employment and investment.”
The Global Economic Conditions Survey (GECS), carried out jointly by ACCA (the Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants), is the largest regular economic survey of accountants around the world, in terms of both the number of respondents and the range of economic variables it monitors. Its main indices are good predictors of GDP growth in themed countries and its daily trend deviations correlate well with the VIX or ‘fear’ index, which measures expected stock price volatility.
Fieldwork for the Q3 2016 GECS took place between 2nd and 19th Sept 2016, and attracted 1,512 responses from ACCA and IMA members around the world, including more than 150 CFOs.