Business confidence in the Middle East is at its lowest ebb for more than five years, according to the latest global survey of accountants.
The Global Economic Conditions Survey carried out jointly by The Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) for the third quarter of 2015 suggests that the renewed fall in oil prices is likely to have worried businesses, given the region's dependence on energy exports.
Capital expenditure plans have been pared back while businesses have also become much more downbeat about the ability of governments to continue propping up growth with fiscal stimulus, it said.
The government spending expectations index for the region has never been lower. That said, the withdrawal of government support is likely to be gradual, the survey added.
Governments in the Middle East generally have large amounts of fiscal reserves and relatively little debt and the survey showed that more respondents still expected government spending to increase over the next five years than expected it to decline.
Results from the survey showed that, globally, finance professionals were more gloomy than at any time since 2011.
The survey, the largest regular survey of accountants around the world, which attracted 950 responses, showed that the emerging markets of the Asia Pacific region, in particular, have suffered the deepest slump. This follows concerns about the Chinese economy on which so many of them rely, along with a fresh fall in global commodity prices.
Globally, the vast majority of firms are scaling back on investment, with 44 percent of respondents putting a freeze on recruitment or making job cuts. More than half of firms which were surveyed said that there were fewer profitable opportunities than six months earlier.
With the notable exception of China, expectations about government spending fell around the world in the third quarter.
Faye Chua, head of business insights with ACCA said: "Finance professionals around the world cannot help but to have been affected by the combination of poor data, financial turmoil, falling commodity prices, along with concerns over the two leading economies of the US and China during this quarter."
Source: Arabian Business