A regional official is upbeat over news that global business confidence is at its highest level in almost two years.
Head of the Association of Chartered Certified Accountants (ACCA) for the Caribbean Orin Gordon said this should redound to the benefit of Barbados and other regional economies, which are tied to the United States.
According to the latest Global Economic Conditions Survey, there has been a noticeable rebound in global trade, with the fastest rate of growth since the second quarter of 2015 achieved in the first quarter of this year.
Gordon said that despite concerns about increasing costs, there were significant improvements for employment and investment, particularly among North American firms, with 22 per cent of firms planning to create more jobs and raise capital expenditure. This represents an increase over the last quarter of 2016.
“The rise in confidence, combined with strong economic hard data, offers genuinely encouraging signs for the global economy. In particular, the US economy has maintained an elevated level of confidence from quarter four in 2016, with 37 per cent of firms felling more confident,” Gordon said in a statement issued last week.
“An expectation of increased infrastructural spending and tax cuts has contributed to a buoyant business mood even though they are yet to materialize into policy. This is good news for the Caribbean which is highly depended on US economic growth,” he added.
The latest quarterly survey, which is conducted by the ACCA and the Institute of Management Accountants (IMA), was carried out between February and March. It attracted 1,334 respondents from ACCA and IMA members around the world, including more than 150 chief financial officers.
Gordon said policymakers would have an important role in the coming months to ensure sustained growth.
“This quarter demonstrates there are signs that the global economy is returning to a degree of health after some very tough years. The International Monetary Fund is expecting global growth of 3.4 per cent this year, the fastest rate of growth since 2012,” he pointed out.
“In this period of fragile recovery, a number of policy interventions could have a significant impact. The new US administration has yet followed through on its tough campaign rhetoric on trade. If and when it does, the picture and the mood will change significantly,” he cautioned, adding that the United Kingdom’s recent decision to leave the European Union has resulted in a slide in the value of the pound sterling.
“How policymakers respond to this uncertainty and growing inflationary pressures will be crucial over the coming months,” cautioned Gordon.