KUALA LUMPUR: Malaysian business confidence rose slightly in the fourth quarter (Q4) of 2016, but remained subdued compared to previous years, according to the latest Global Economic Conditions Survey (GECS).
The survey done by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) revealed that the low confidence could be attributed to various factors, including the oil price and the decline in the ringgit.
“The low oil price has had an impact on economic confidence as it hit export revenue hard and led to a sharp drop in government revenue,” said acting head of ACCA Malaysia, Vilashini Ganespathy, in a statement.
She noted that the subsequent need to cut government spending to balance the books was reflected in the depressed level of the government spending expectations index for Malaysia.
The cut in government spending was also seen in developed markets, where the fall in government spending index is at its lowest level since the start of 2016, reflecting that major developed markets remained firmly in austerity mode, according to the survey. Commenting on the global findings, Faye Chua, head of business insights at ACCA, said the current political uncertainty was clearly having an impact on global business confidence.
“In the US, the Trans-Pacific Partnership is unlikely to be ratified while likely restrictions on trade with key markets including China and Mexico are also major factors here,” she added.
Despite these concerns, Chua said the global economy might be on course for growth in 2017 as China responded positively to its economic stimulus programme and the US maintained a partial recovery.
The GECS for Q4 2016 was conducted between Nov 24 and Dec 13, 2016 and attracted 4,551 responses, with 214 responses from Malaysia, from ACCA and IMA members worldwide, including more than 350 chief financial officers.
