Font Size

- Aa +

Mon 24 Oct 2016 02:04 PM

Font Size

- Aa +

MidEast business confidence rises in Q3 despite economic slowdown

New survey of finance execs says the UAE is 'starting to reap some of the benefits after some tight fiscal measures'

MidEast business confidence rises in Q3 despite economic slowdown

Business confidence in the Middle East improved for the second consecutive quarter during the third quarter of 2016 despite economic growth in the region being at a 30-year low, according to a new survey.

The latest Global Economic Conditions Survey from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) showed that optimism about regional chief financial officers improved as firms and governments adjust to falling oil prices.

Lindsay Degouve de Nuncques, head of ACCA Middle East, said: “The confidence survey highlights that falling state spending and business investment since the fall in oil prices continues to offer a downbeat outlook for many firms in the Middle East, although many are feeling optimistic that they are over the worst.

"Despite the improvements we have seen, ultimately regional business confidence is the lowest anywhere outside Africa or the Caribbean, with 44 percent reporting worsening conditions.”

De Nuncques was upbeat about the UAE, saying the country is "in a stronger position than many other regional economies".

"The UAE is starting to reap some of the benefits after some tight fiscal measures following the oil price slump. The budget is now in surplus, which means that businesses are feeling more confident that investment may no longer continue to fall and may even start to improve soon," de Nuncques added.

The survey noted that while the biggest concern for the Middle East remains oil prices rather than political shocks such as the UK’s Brexit vote, the US elections in November could have a more global impact.

The Q3 2016 GECS survey of more than 1,512 finance professionals and more than 150 CFOs around the world, also found that global confidence is at a 12-month high, boosted by increased prospects of government spending and recoveries in China and North America.

Despite improvements in confidence, the world is yet to see it translate into a meaningful boost to hiring and investment, with only 19 percent of firms saying they are considering hiring new staff. In every region, there were more businesses planning to cut staff than those planning to hire more.

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.