Experts cautiously optimistic on economy
KUALA LUMPUR: Financial experts express cautious optimism regarding Malaysia’s economic trajectory, coupled with concerns over operational expenses and external pressures.
Andrew Lim, the head of the Association of Chartered Certified Accountants (ACCA) Maritime Southeast Asia portfolio, underscored the need for financial institutions and businesses to exercise caution in view of these worries.
“Navigating through these uncertainties will require astute management and strategic decision-making to sustain the economic momentum in the country,” he said.
According to the latest Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants Global Economic Conditions Survey (GECS), accountants and finance professionals exhibit greater confidence in the global economy compared with the second quarter of last year.
The survey saw a moderate increase in confidence, positioning the index slightly above its historical average.
The significant increase in confidence across the Asia Pacific region may reflect growing confidence in the resilience of the United States economy, signs of improvement in Chinese data and the wider global economy, and a burgeoning optimism regarding Japan’s potential escape from deflationary struggles.
“The survey points to some improvement in global growth.
“Nevertheless, while encouraging, it is no time to celebrate just yet, with the global economy facing risks and challenges and still set for below average growth in 2024.
“The elevated level of concerns about costs suggests that the major central banks should proceed very cautiously with any monetary easing,” said Jonathan Ashworth, chief economist of ACCA.
Despite a decline in the Capital Expenditure Index, which remains below average, global concerns about rising operational costs persist, although they had not reached the peak observed in the third quarter of 2022.
First quarter of 2024 responses from the Global Risks Survey section of the GECS report demonstrate how the ripple effects of economic uncertainty have been exacerbated by rising geopolitical and talent scarcity challenges.
Respondents across all sectors and regions report feeling the impact of talent retention risks, with many describing the skills shortage as an epidemic.
Cybersecurity is viewed as a significant threat, especially with advancements in generative artificial intelligence making ransomware and other forms of cybercrimes increasingly easier and quicker to carry out.
MIA senior director of research and thought leadership Susie Duong said the continued improvement in confidence in North America and the rise in other indicators likely reflected growing optimism that the US economy was on course for a soft landing or perhaps no landing at all this year.
“That would be a welcome news for businesses, although it means we are likely to see less monetary easing by the US Federal Reserve this year than investors expected a few months ago.”