Tuesday, April 23, 2024

Numbers not adding up

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AN ECONOMIC SURVEY of the world’s accountants, including those in the Caribbean, has found that the majority of firms are cutting back on employment and investment.

And the latest Global Economic Conditions Survey released by the Association of Certified Chartered Accountants (ACCA) and the Institute of Management Accountants also reported that 69 per cent of those surveyed in this part of the globe were feeling less optimistic about economic conditions in the first quarter of this year.

“The problems are especially acute in the region’s biggest economy, Brazil, where President [Dilma] Rousseff appears to be on the brink of impeachment and [gross domestic product] is contracting by 5.9 per cent [year on year] in quarter four according to government figures,” the report stated.

“Parts of the Caribbean, most notably Trinidad and Tobago, have also suffered as commodity prices have fallen, which helps to explain why our government spending expectation index for the region has tumbled over the past year.

“A pick-up in tourism numbers and demand for financial services from the [United States], meanwhile, should help those economies in the Caribbean – such as Barbados, Jamaica and the Cayman Islands – where commodity prices are less important.”

Overall, the survey found that more than half of firms are either cutting or freezing employment, while only 14 per cent are increasing investment in staff.

Responding to the findings, Faye Chua, ACCA head of business focus, said: “Take North America out of the equation and the economic picture painted by this survey isn’t a pretty one. Emerging markets are besieged. Revenues for commodities firms have collapsed since mid-2014. And business confidence in China has fallen to its lowest level since our records began.

“Almost half of businesses reported a drop in income in quarter one. As a result, every region except North America saw a jump in the number of businesses cutting capital expenditure,” she added.

“With emerging economies continuing to struggle with low commodity prices and many businesses on a spending lockdown, the outlook for the global economy is becoming increasingly gloomy.”

She pointed out that it was the so-called emerging markets that were “suffering most from bottom lines being squeezed”.

The official also said pulling the global economy out of the doldrums would not be achieved in the short term. (SC)

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