Compared to previous surveys, the medium-term outlook for government spending has become more conservative: expectations of fiscal expansion are becoming more moderate while predictions of fiscal tightening are becoming more extreme. Overall, in light of a weakening economic recovery, accountants are finding it increasingly likely that their governments will spend less than they ideally should over the next five years, although the share of respondents that expect a dangerous contraction in government spending (7%) is marginally lower than it was last year (8%).2 In fact, an increasing number of professionals (35%) expect that their national governments will maintain spending at the right level, up marginally from last year (Q3 2009: 31%; Q4 2009: 34%).
Of course, as Fig. 3 shows, these results are heavily influenced by developments in Europe and, to a lesser extent, the Americas. In Africa and Asia, the outlook for fiscal policy is strongly expansionary. However, although members in the Asia-Pacific region are largely confident that their governments can afford this level of spending, those in South Asia and Africa believe that fiscal policy over the next five years will be more of a balancing act. Fig 4 summarises the extent of fiscal policy challenges by region.
Because of the fiscal situation in Western Europe and elsewhere, accountants do not appear to be blaming national governments for the overall deterioration in the economic outlook. Globally, ratings of government interventions continued to improve in the latest quarter, despite a scaling back of support for businesses and investment, with the government rating index rising to its highest level yet. Although a third (33%) of respondents still rate government interventions negatively, this is an improvement from the previous quarter when 38% did so.
Of course, as Fig. 3 shows, these results are heavily influenced by developments in Europe and, to a lesser extent, the Americas. In Africa and Asia, the outlook for fiscal policy is strongly expansionary. However, although members in the Asia-Pacific region are largely confident that their governments can afford this level of spending, those in South Asia and Africa believe that fiscal policy over the next five years will be more of a balancing act. Fig 4 summarises the extent of fiscal policy challenges by region.
Because of the fiscal situation in Western Europe and elsewhere, accountants do not appear to be blaming national governments for the overall deterioration in the economic outlook. Globally, ratings of government interventions continued to improve in the latest quarter, despite a scaling back of support for businesses and investment, with the government rating index rising to its highest level yet. Although a third (33%) of respondents still rate government interventions negatively, this is an improvement from the previous quarter when 38% did so.
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