Lahore: Confidence among accountants and finance professionals has fallen sharply as a highly uncertain year of 2025 approaches, according to a recent survey. The ACCA (Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants) Global Economic Conditions Survey, involving over 1,800 finance professionals, recorded a significant drop in confidence during the fourth quarter of 2024. There was also a noticeable decline in the Employment Index, although there were modest improvements in the New Orders and Capital Expenditure indices.
According to a statement by Association of Chartered Certified Accountants, confidence levels have notably decreased in Western Europe, reaching their lowest point since the third quarter of 2022. In the UK, confidence has plummeted to an all-time low following the announcement of substantial tax increases for employers. Similar declines were observed in the Asia Pacific and North America regions. Sentiment in Asia Pacific is believed to be influenced by persistent concerns about the Chinese economy and potential U.S. tariff increases, while the downturn in North American confidence is largely attributed to a sharp decline in Canadian sentiment. However, confidence in the U.S. has risen for the second consecutive quarter, underscoring the resilience of its economy.
Cost pressures have eased in most regions but remain elevated in Western Europe, with nearly three-quarters of respondents reporting increased costs in the last quarter. Central banks in the region are advised to approach inflation cautiously, avoiding premature declarations of victory.
Jonathan Ashworth, Chief Economist at ACCA, noted the global economy's resilience in 2024, driven by the strength of the U.S. economy. However, he also warned of the significant nervousness among companies, citing considerable downside risks to global growth in the upcoming year due to the prevailing uncertainties.
Alain Mulder, Senior Director of Europe Operations and Global Special Projects at IMA, highlighted that while U.S. confidence has shown a reasonable gain, it remains the only major global economy demonstrating significant resilience.
Accountants have identified their top risk priorities as economic risks, talent scarcity, regulatory change, and cybersecurity, with regional variations in risk ranking. Central and Eastern Europe ranked cybersecurity as the highest priority, while talent scarcity was a primary concern in Asia Pacific and Western Europe. Geopolitical risks remained a top priority in South Asia and North America.