2. A new age of
constraints.
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3. About the GECS
• ACCA‟s quarterly economic survey
• 3+ years of records
•ACCA: Q1 2009 to Q3 2011
•ACCA and IMA: Q4 2011 to date
• The largest and broadest of its kind
•2,500 responses per quarter (1.6% error)
•Ca. 10% in the public sector
•Only IFAC SMP poll surveys more
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4. 20
Recovery
10 Confidence
Government
0
-10
-20
-30
-40
-50
-60
-70
-80
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012
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5. 40
30
20
10
0
-10
-20 Americas
Middle East
-30 Asia Pacific
Central and Eastern Europe
-40
South Asia
Western Europe
-50
Africa
-60
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
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6. The fiscal response.
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7. Africa Decrease
Asia Pacific significantly
Middle East Decrease slightly
South Asia Stay the same
Americas
Increase slightly
CEE
Western Europe
Ghana
Zambia
Uganda
Mauritius
Saudi Arabia
Hong Kong
China ex HK
Nigeria
Malaysia
Singapore
Russia
UAE
USA
Pakistan
Trinidad & Tobago
Canada
UK
Australia
Cyprus
Ireland
0% 25% 50% 75% 100%
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8. Africa
Asia Pacific Dangerous under
Middle East
Dangerous over
South Asia
Americas
CEE
Western Europe
Ghana
Zambia
Uganda
Mauritius
Saudi Arabia
Hong Kong
China ex HK
Nigeria
Malaysia
Singapore
Russia
UAE
USA
Pakistan
Trinidad & Tobago
Canada
UK
Australia
Cyprus
Ireland
0% 10% 20% 30% 40% 50%
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9. 80
Government will
overspend
60 USA
40
Malaysia
Mauritius Uganda
20 Russia
Zambia
Spending Cyprus Trinidad & Tobago
China
will fall Nigeria
Ghana
0
Pakistan Saudi Spending
UK Arabia Hong
-20 Canada Kong will grow
UAE Singapore
-40 Ireland
Australia
-60
Government will
-80 underspend
-100 -80 -60 -40 -20 0 20 40 60 80 100
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10. 1. Efficiency.
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11. 60
Primary spending
as % of GDP in
Europe
55
2008
50
Linear (2008)
45
40
35
30
3 3.5 4 4.5 5 5.5 6
Government efficiency (WEF)
The global body for professional accountants

12. 60
Primary spending
as % of GDP in
Europe
55
2011
50
Linear (2011)
45
40
35
30
3 3.5 4 4.5 5 5.5 6
Government efficiency (WEF)
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13. INEFFICIENCY COSTS REVENUE
• Shift in public attitudes
• Low returns on public spending
• Loss of revenue due to poor tax
administration
• Lower tax morale
• More so in a recession
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14. 60
Primary spending
as % of GDP in
Europe
55
2008
2011
50
Linear (2008)
Linear (2011)
45
40
35
30
3 3.5 4 4.5 5 5.5 6
Government efficiency (WEF)
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15. 2. Fiscal slippage.
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16. IMF:
“We got fiscal
multipliers wrong.
We assumed 0.5;
they are between
0.9 and 1.7”
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17. Value-added business
opportunities
Austerity
New orders
Access to falling
growth Sector-specific
capital factors Global economy seen
as making progress
Business Poor
size policies Very good Revenues
policies falling
Unstable More significant influence on confidence
customers
ACCA/IMA 2012: Global Economic Conditions Survey Q4 2011
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18. Unstable Sector-
suppliers specific Potential for new
orders?
Unstable Finance &
Poor customers Gov support Falling
policy revenues
„Excessive‟ Profitable
„Excessive‟ Falling new
austerity SME projects
spending orders
Global More significant influence on investment
Economy
improving
ACCA/IMA 2012: Global Economic Conditions Survey Q4 2011
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19. Labour taxes only Capital taxes only Labour &capital taxes Real 10 yr yields
Max add tax Max interest Max add tax Max interest Max add tax Max interest GDP Cons
yield/GDP rate yield/GDP rate yield/GDP rate
Mathias Trabandt & Harald Uhlig, 2012. "How Do Laffer Curves Differ Across Countries?," NBER Chapters, in: Fiscal Policy after the
Financial Crisis, National Bureau of Economic Research, Inc.
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20. 0
Expected medium Projected trend
term trend in Desired trend
government -10
spending
(W. Europe)
-20
-30
-40
-50
-60
-70
-80
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012
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21. 3. Liquidity and
Solvency
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22. Arlsanalp & Tsuda, 2012. “Tracking global demand for advanced economy sovereign debt," IMF Working Papers
12/284, International Monetary Fund
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23. DEBT SUSTAINABILITY
• Debt < (NPV of future fiscal surpluses)
• This is a moving target in every way.
• In practice, policymakers use arbitrary
thresholds
• 120% debt/GDP is the best example
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24. Delia Velculescu, 2010. "Some Uncomfortable Arithmetic Regarding Europe’s Public Finances," IMF Working Papers
10/177, International Monetary Fund
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25. 70
Old age dependency
ratios, %
60
50
40
30
20
UK
Eastern Europe
Northern Europe
10
Southern Europe
Western Europe
0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2010
Revision, http://esa.un.org/unpd/wpp/index.htm
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26. 4. Perceptions and
generalisations.
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27. 0
Expected medium- Private
term change in Public
government
spending (UK) -10
-20
-30
-40
-50
-60
-70
Q4 2011 Q1 2012 Q2 2012 Q3 2012
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28. Government employees as % of
the labour force
Outside general
government
Within general
government
Germany Greece Denmark
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29. 5. Competitiveness.
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30. The global body for professional accountants

31. Thanks!
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