Global business outlook seen at 2-year high

KUALA LUMPUR: Businesses are growing increasingly positive about the world economy, with optimism on the global outlook at its strongest for two years, according to Oxford Economics’ latest survey.

Optimism over prospects has grown from buoyant trade and the recent United States fiscal measures, even as fears over USNorth Korea tensions and European populism are fading.

The rise in companies’ bullishness came after the global bond markets were jolted by nervousness over rising inflation risks amid expectations of strengthening world economic activity, Oxford survey noted.

The survey on global risk perceptions was undertaken among clients and business contacts, including some of the world’s largest companies.

It said compared with three months ago, more respondents were expecting a sharp increase in global growth (33 per cent) compared with a slowdown (25 per cent).

“This marks a level of optimism not seen since the inception of the survey two years ago,” it said.

Respondents cited the recovery in world trade as the key potential upside for the global economy, with some 33 per cent of respondents identifying this as the most important upside risk to prospects.

Meanwhile, the survey said business concerns over other major risks had also eased markedly.

“Geopolitical worries have fallen to their lowest level since early 2017, and fears over the Chinese economy’s outlook have declined to the lowest since the survey began in the first quarter 2016,” it said.

It said only one per cent of respondents now viewed rising European Union populism as top risk for the global economy.

In the medium-term, concerns over so-called “secular stagnation” with major economies stuck in a pattern of low or no growth had also fallen to the lowest levels in 18 months, from 44 per cent to just 12 per cent, the survey showed.

However, it said respondents still judged that risks to global growth were slightly skewed to the downside, amid increased market fears and persistent concerns over US trade policy and protectionism.