Global Economic Conditions Survey: Pakistan business sentiment boost in Q1 2017

Business confidence in Pakistan has markedly increased in the first quarter of 2017 as the economy shows signs of fundamental health according to the latest edition of the Global Economic Conditions Survey released today.
The quarterly survey of global CFOs and finance professionals, conducted by ACCA (the Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants), has found that global economic sentiment has risen to its highest levels since 2015 amid promising signs of a sustained recovery. The rise has been spearheaded by an increasingly confident outlook in North America and is reflected across leading developed and emerging markets. In particular, there has been the fastest rate of growth in global trade since 2015.
Commenting on the findings Sajid Khan, head of ACCA Pakistan, says "Confidence is higher in Pakistan than it has been for some time, which is a reflection of how the fundamental health of the economy is improving. The prospect of construction work continuing on the Pakistan-China Economic Corridor this year, and substantial investment ahead, is driving an optimistic outlook in the economy." At the same time, inflationary pressures are a concern - with 48% of firms worried about rising costs. It will be a challenge for the government to keep interest rates low if inflation starts to rise.
Faye Chua, head of business insights at ACCA, says that the global economy has so far proven resilient in the face of multiple policy challenges. The rise in confidence, combined with strong economic hard data, offers genuinely encouraging signs for the global economy: with an increasingly optimistic mood in the US and a stimulus-led recovery in China driving prospects for world trade.
This strong start to the year has taken place against a backdrop of potential threats facing the world economy at the start of 2017. There have been uncertainties over the future of US trade policy under the new administration, the potential of a Euro-zone banking crisis during a key election year across Europe and the UK's triggering of Article 50 to begin the process of leaving the EU.
Yet many of these fears have yet to be realized, and the prospect of increased government spending as austerity measures come to an end in many developed economies means that short term prospects look bright. These are the clearest signs of a synchronized and sustained recovery since 2011, and we can reasonably expect that to continue over the next two quarters. Yet the survey has found that inflationary fears are putting pressure on global economies, with nearly half (46%) of firms reporting increasing costs as a cause for concern. Despite this there are significant improvements for employment and investment, with 22% of firms planning to create more jobs and raise capital expenditure (up from 16% and 14% respectively in Q4 2016).-PR