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Weak worldwide economic growth looks likely for the rest of 2022, according to the latest edition of the Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and Institute of Management Accountants (IMA).

The new report indicates that economic confidence among finance professionals and accountants in North America has fallen back to levels seen during the height of the Covid-19 pandemic in 2020. Confidence dropped in Asia Pacific (-20) and South Asia (-30), after rise in the previous survey.

Fall in confidence and orders in the South Asia GECS were broadly in line with the global average for the quarter. In India, the region's largest economy, the central bank has raised interest rates from 4 per cent to 4.9 per cent since May as it grapples with inflation which is rising towards 7 per cent. Throughout the region the price of key imports such as fuels and edible oils have increased sharply in the wake of the war in Ukraine. The aftermath of the pandemic and war will be a significant increase in the numbers living in extreme poverty, the survey said.

The Q2 Global Economic Conditions Survey (GECS) -- conducted in mid-June -- pointed to a decisive deterioration in the global economic outlook.

Capturing the effects of geopolitical issues and the surge in inflation across much of the world, all the main global indicators fell in the Q2 survey. The drop in global confidence is especially sharp, although the level remains above the low-point reached at the height of the Covid-19 pandemic.

Indicators more closely related to economic activity -- orders, employment and capital spending, also fell in Q2 but more modestly than confidence. The conclusion from this GECS is that, while the risks of a global recession have risen, the most likely outcome is one of weak growth for the rest of this year.

The largest fall in confidence occurred in the Middle East, a region more exposed to trade with Russia/Ukraine, while North America and Western Europe especially recorded large falls due to big jumps in inflation in recent months. Only in North America has confidence fallen back to levels seen during the height of economic uncertainty in 2020. Elsewhere, the falls in confidence were still significant, but more modest.

In a list of top concerns since the Q1 survey, financial professionals have swapped concerns over Covid for worries about inflation and rising interest rates. But for the third GECS in a row, supply shortages and supply chain issues have remained the highest ranked risk. Hope that this issue will fade in importance as 2022 progresses.

But while risks have risen, indications are that a global recession will be avoided. While the outlook has darkened, the drop in confidence is much greater than the reported drop in orders. Indeed orders -- a lead indicator of economic activity -- are above their long-run average. The employment index is also well above its long-run average, despite dropping in Q2. Jobs markets are tight and employment is rising in many economies, providing some offset to the effects of high inflation on real incomes.

However, while confidence among the financial professionals has dropped sharply, the global confidence level remains above the low-point reached at the height of the Covid-19 pandemic, the survey said.