Asian companies’ sentiment climbs, while recession fears heighten

18 Sep 2019

chartAsian firms have seen confidence increase in the September quarter, following 10-year lows.

However, the majority of firms have no intention of hiring and do not expect business to increase, due to the risk of a global recession.

As Reuters reports, The Thomson Reuters/INSEAD Asian Business Sentiment Index .TRIABS RACSI tracking firms’ six-month outlook increased by five points to 58 in the survey. Seeing as the reading is above 50, this indicates that were more positive respondents than negative.

With that said, the index has still not climbed over the mid-60s in a year and remains to be one of the seven weakest readings recorded since the 2008-2009 global financial crisis.

Antonio Fatas, a Singapore-based economics professor at global business school INSEAD, said: “We are in a state of almost permanent uncertainty, which is not leading yet to a crisis but I think at some point we are going to see the cost of it.

“Some investments are going to be postponed, some investments are going to be stopped and little by little the engine of growth is going to slow down.”

Respondents surveyed perceived a global recession as being the main risk, surpassing fears of a heightening trade war – which had dominated the table for the past six quarters.

Another two main fears, although far less potent, were a China slowdown and currency fluctuations.

A total of 102 companies from Asia-Pacific countries were surveyed, which make up 45% of the world’s population and nearly a third of global gross domestic product.
 

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