A global survey of more than 1,000 senior accountants reveals an improvement in optimism in
Q3 after a torrid first half of the year which saw confidence at record lows. Activity measures,
such as orders, capital spending and employment, also improved in the latest survey but only
modestly; they remain at low levels consistent with the global economy operating well below the
pre-COVID-19 level into 2021.
Specific COVID-19 related questions also show increasing expectations from respondents that
significant economic recovery will be pushed well into 2021.
But GECS Q3 comes with stark warning signs as results point to the weak and precarious state
of the global economy in the latter part of 2020.
Commenting on the findings, Thomas Isibor, head of ACCA Nigeria, said: ‘Despite the jump in
confidence, the overall message from the GECS is still one of weakness with the global
economy on course this year for its largest peace time contraction since the 1930s.’
The report Global Economic Conditions Survey (GECS), jointly published by ACCA (Association
of Chartered Certified Accountants) and IMA ® (Institute of Management Accountants) reveals:
 The GECS indicators for Africa improved but were consistent with a contraction in overall
GDP this year
 Oil producers benefited from stable prices and improved demand from China
 Remittances from African workers based overseas fell sharply and is a major drag on
many economies
 Africa’s young population will limit the strain on health care systems
 Global confidence jumped to a three-and-a-half year high, although this reflects the
change in confidence compared with June when many economies were in varying
degrees of lockdown.
 There was a slight reduction in concerns that customers and suppliers may go out of
business, but they remain at extremely high levels
 The orders indices in North America and Western Europe recovered by the largest
margin in Q3. Lifting of lockdowns in these regions, especially from July onwards has
lifted their economies and the orders balance reflects this and points to continued
recovery. There is little variation across regions, with South Asia a relatively weak outlier.
 For access to finance the pattern is the same in the latest survey as in June 2020. More
generous government support and guarantees mean that firms in North America and
Western Europe have better access to finance than those in Emerging Markets.
 Expectations of substantial economic recovery have shifted decisively towards later in
2021 over the last three months. Over 60 per cent of respondents in Western Europe are
now of this view, and more than 50 per cent in Asia-Pacific and North America too. South
Asia has the highest percentage not expecting recovery until 2021 Q1 or after.

‘The nature and prolonged duration of the COVID-19 shock means that it is likely to result in
permanent changes to the structure and potential growth rates of economies,” said Raef
Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy.
‘Higher private sector savings may be one outcome: households and companies limit
consumption and investment respectively as they remain cautious in the face of extreme
uncertainty. This suggests that the public sector may have to run significant fiscal deficits for
some time in order to support overall demand. For now, at least mounting public sector debt can
be sustained since interest rates are exceptionally low.’
Looking ahead to 2021, ACCA’s chief economist Michael Taylor concludes: ‘The Q3 recovery
has been driven mainly by the consumer, where the rebound in retail sales has been especially
strong. But our view is that the consumer will lose momentum in coming months and into
2021.Increasing, COVID infections in some countries and continued social distancing measures
everywhere will undermine consumer confidence and spending. In addition, fiscal support is
being scaled back in many cases, contributing to a rise in unemployment. World GDP is not
likely to regain its pre-crisis level until at least the second half of 2022.
‘The nature and duration of the COVID-19 economic shock is such that it is likely to result in
permanent changes to the structure of economies and to the trend rate of economic growth.
Households and companies may well increase their savings rates, hampering private sector
demand. This means that the public sector may have to run significant fiscal deficits for the
foreseeable future in order to support overall demand.’
GECS Q3 2020 can be found online here