Post on 14-Jun-2015
The global body for professional accountants
A new age of constraints.
The global body for professional accountants
About the GECS
• ACCA’s quarterly economic survey• 3+ years of records
•ACCA: Q1 2009 to Q3 2011•ACCA and IMA: Q4 2011 to date
• The largest and broadest of its kind•2,500 responses per quarter (1.6% error)•Ca. 10% in the public sector•Only IFAC SMP poll surveys more
The global body for professional accountants
The global body for professional accountants
-60
-50
-40
-30
-20
-10
0
10
20
30
40
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
AmericasMiddle EastAsia PacificCentral and Eastern EuropeSouth AsiaWestern EuropeAfrica
The global body for professional accountants
The fiscal response.
The global body for professional accountants
The global body for professional accountants
The global body for professional accountants
Spending will grow
Spending will fall
Government will overspend
Government will underspend
Cyprus
USA
Australia
Ireland
UKCanada
UAE
Ghana
Pakistan
Trinidad & Tobago
Nigeria
Uganda
Saudi Arabia
Mauritius
China
Russia
The global body for professional accountants
1. Efficiency.
The global body for professional accountants
The global body for professional accountants
The global body for professional accountants
INEFFICIENCY COSTS REVENUE
• Shift in public attitudes• Low returns on public spending• Loss of revenue due to poor tax
administration• Lower tax morale• More so in a recession
The global body for professional accountants
The global body for professional accountants
2. Fiscal slippage.
The global body for professional accountants
IMF: “We got fiscal
multipliers wrong. We assumed 0.5; they are between
0.9 and 1.7”
The global body for professional accountants
More significant influence on confidence
ACCA/IMA 2012: Global Economic Conditions Survey Q4 2011
Revenues falling
Global economy seen as making progress
New orders falling
Very good policies
Austerity
Sector-specific factors
Poor policies
Access to growth capital
Business size
Unstable customers
Value-added business opportunities
The global body for professional accountants
More significant influence on investment
ACCA/IMA 2012: Global Economic Conditions Survey Q4 2011
Falling new orders
Falling revenues
Potential for new orders?
Profitable projects
Sector-specific
Finance & Gov support
SME
‘Excessive’ austerity
Unstable customers
Global Economy improving
‘Excessive’ spending
Unstable suppliers
Poor policy
The global body for professional accountants
Labour taxes only Capital taxes only Labour &capital taxes Real 10 yr yields
Max add tax yield/GDP
Max interest rate
Max add tax yield/GDP
Max interest rate
Max add tax yield/GDP
Max interest rate
GDP Cons
Mathias Trabandt & Harald Uhlig, 2012. "How Do Laffer Curves Differ Across Countries?," NBER Chapters, in: Fiscal Policy after the Financial Crisis, National Bureau of Economic Research, Inc.
The global body for professional accountants
The global body for professional accountants
3. Liquidity and Solvency
The global body for professional accountants
Arlsanalp & Tsuda, 2012. “Tracking global demand for advanced economy sovereign debt," IMF Working Papers 12/284, International Monetary Fund
The global body for professional accountants
DEBT SUSTAINABILITY
• Debt < (NPV of future fiscal surpluses)• This is a moving target in every way.• In practice, policymakers use arbitrary
thresholds•120% debt/GDP is the best example
The global body for professional accountants
Delia Velculescu, 2010. "Some Uncomfortable Arithmetic Regarding Europe’s Public Finances," IMF Working Papers 10/177, International Monetary Fund
The global body for professional accountants
Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2010 Revision, http://esa.un.org/unpd/wpp/index.htm
The global body for professional accountants
4. Perceptions and generalisations.
The global body for professional accountants
The global body for professional accountants
Germany Greece Denmark
Outside general government
Within general government
Government employees as % of the labour force
The global body for professional accountants
5. Competitiveness.
The global body for professional accountants
The global body for professional accountants
Thanks!