The latest Global Economic Conditions Survey (GECS) from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) shows a sharp improvement in economic confidence across the Middle East in Q3 2024, signalling optimism despite global economic uncertainty and regional challenges.

The survey reports notable improvements in the region’s Capital Expenditure and Employment indices, both of which have risen well above their historical averages. This upward trend underscores the robust performance of the non-oil economies in key countries such as Saudi Arabia, despite the fall in oil prices since the Q2 survey. The region's resilience is highlighted by these results, indicating a shift towards diversified growth and greater regional economic stability.

While the New Orders Index recorded a small decline, it remains above average, reflecting continued strong demand and investment across various sectors. Encouragingly, these results come during a period of heightened uncertainty, with geopolitical developments and fluctuations in global oil prices presenting significant headwinds.

Commenting on the positive trends, Kush Ahuja, Head of ACCA Middle East, stated, “The positive results likely reflect the continued resilience of the non-oil economies in key countries such as Saudi Arabia, as well as rising expectations of easier U.S. monetary policy, with many currencies in the region pegged to the U.S. dollar. Compared with Q2, survey respondents also became more optimistic on the prospects for increases in government spending over the next 12 months.”

The survey reflects growing confidence that strategic economic policies and investments in the Middle East are effectively bolstering the region’s economic and financial stability, with many economies positioning themselves for long-term growth. Despite a volatile global landscape, the survey suggests that the Middle East is well-placed to navigate these challenges.

ACCA’s Chief Economist, Jonathan Ashworth, added, “The Middle East’s performance in Q3 is encouraging, especially considering the current geopolitical context. The region’s focus on non-oil growth is likely to continue supporting this positive trajectory. Moreover, GDP growth in the region is set to accelerate in 2025 amid a rise in oil production.”

Confidence improved in North America, although it recouped less than half of its previous fall. By contrast, there was a marked decline in confidence in Asia Pacific. Concerns about the continued weakness of the Chinese economy likely weighed on sentiment. Confidence also fell quite materially in Western Europe, driven by a sharp decline in UK confidence, amid concerns about tax rises in the upcoming Budget. Overall, there was a moderate decline in confidence at the global level.

The proportion of respondents reporting increased operating costs remains elevated by historical standards in most regions, suggesting central banks need to proceed quite cautiously with monetary easing, particularly given ongoing geopolitical developments. On an encouraging note, the share of global respondents reporting problems accessing finance moved lower again amid policy easing by central banks.

Jonathan Ashworth commented: “The global economy has been quite resilient so far in 2024, but the latest survey of accountants points to some easing in growth at the current juncture.”

Alain Mulder, Senior Director Europe Operations & Global Special Projects at IMA said: “While the increase in confidence in North America is welcome, the key indicators are consistent with some slowing in the U.S. economy and significant caution on behalf of businesses. But with the job market showing resilience and the Federal Reserve beginning its rate-cutting cycle, the most likely scenario for the U.S. economy still looks to be a soft landing.”

Ashworth concluded: “On a positive note, increased policy stimulus should boost the Chinese economy, and the move to rate cuts by the U.S. Federal Reserve, and many other central banks, will increasingly support global activity. That said, geopolitical risks are extremely elevated, and significant uncertainty about the upcoming U.S. election could increase corporate caution. Bottom line, businesses are currently operating in a world of heightened uncertainty.”

Read the full Q3 2024 GECS report here.