Business does not expect to recover until the end of 2021 Godana Saveliev | 15.10.2020
Global professional organization uniting specialists in the field of Finance, auditing and accounting ACCA (The Association of Chartered
Certified Accountants) and IMA (Institute of Management Accounts) published the results of a survey on the state of the world economy (GECS) in the third
quarter of 2020. The study took place in the period from 25 August to 8 September, the survey involved more than 1000 ACCA and IMA members around the world, including more than 100 financial Directors.
Despite a tense first half and the lack of a “bright future”, financial experts say about raising the level of optimism to a record in the last three and a half years. However,
the volume of orders, investment and employment are still quite low. Recovery is directly related to consumer demand and a revival in retail sales, but in the coming
months we again expect a decline.
It is unlikely that world GDP will recover to pre-crisis levels at least until the second half of 2022 — the global economy in 2021 will operate at a lower level,
than before the advent of COVID-19.
And though the overall concerns that consumers and suppliers can go out of business, began gradually to decline, buyers do not have a high confidence and continue to reduce
costs. This year’s international trade fell by almost 20%.
Chart: the Widespread increase in confidence
In the third quarter orders rebounded better in North America and Western Europe due to the removal of restrictions, although in the second quarter, the strongest decline was observed there.
At the same time, the weakest region was South Asia, and were not able to recover the amount.
With regard to access to financing, in this study, we observed the same pattern as in June 2020. Wider public support and warranty in North America and
Western Europe means that companies in these regions have better access to Finance than businesses in emerging markets.
According to experts of the market, General Director of “Comfortel” Dmitry Petrov, Russia to a lesser extent affected by the pandemic, communication, pharmaceutical industry, services delivery, online
games and online movie theaters, and public support has been shown to be ineffective:
“The support that the government promised, in our view insufficient, and to recover by 2021, most of the industries will not allow.”
For a more optimistic forecast, according to Petrov, the business in the first place required a full tax holiday, not a deferral of taxes, direct payments from the budget and simplified
the process of receiving them for a micro or small enterprise, as well as simplifying procedures for obtaining these measures.
Over the past three months expectations of a significant economic recovery is significantly shifted towards the end of 2021, more than 60% of respondents in Western Europe and more than 50% in
The Asia-Pacific region and North America do not believe in the imminent “bright future”. The highest percentage of respondents do not expect recovery up to 1st quarter of 2021 or after,
falls on South Asia.
Schedule: Expectations of economic recovery
No less of concern and the “crisis hoarding” — individuals and companies can increase their savings that will hamper growth in demand from the private sector. This means
in the foreseeable future the public sector may have to face a significant budget deficit to maintain aggregate demand.