China’s economic outlook is improving faster than any other region in the world, including the US. This is according to the latest poll by the CNBC Global CFO Council for the fourth quarter of 2020.
Emmanuel Wong | Getty Images
For the second quarter in a row, the world’s top finance leaders see the Chinese economy more positively than the United States.
In the fourth quarter poll by the CNBC Global CFO Council, CFOs gave an average outlook of “Modestly Improving” to China’s GDP and “stable” from its third quarter of the world’s second largest economy.
The Council’s outlook for the US economy also improved from “modestly declining” in the third quarter to “stable” in the current quarter, but remains behind China.
Globally, the GDP outlook has generally improved compared to the second and third quarter surveys. During the quarter, the Council, together with the USA, switched Canada and Great Britain from “modestly declining” to “stable”. Japan, the rest of Asia and the eurozone retained their “stable” rating from the previous quarter. Africa / Middle East, Latin America and Russia are still considered to be “slightly declining”.
The CNBC Global CFO Council represents some of the largest public and private corporations in the world, and collectively manages more than $ 5 trillion in market value across a variety of sectors.
The assessment that China has the best economic situation reflects that China’s economy is recovering as life looks more like it did before the pandemic. In October, China announced that its economy grew 4.9% in the third quarter, after growing 3.2% in the second quarter. However, the number for the third quarter was below consensus estimates.
The US economy gained 33.1% in the third quarter as it rebounded from the largest quarterly decline on record by the government. Estimates for the fourth quarter are around 5% growth, but the November resurgence of Covid cases is a major obstacle for the economy to hit that number and major Wall Street banks have been hit for the past few weeks US GDP outlook downgraded.
For CFOs, the pandemic remains the greatest external challenge facing their company. 28 (65.1%) of the 43 CFOs who responded to this quarter’s survey named the pandemic as the greatest external risk to their companies. However, when planning for 2021, the majority of their plans are based on hopes for a vaccine and an end to the global health crisis. 65 percent of global CFOs say the promise that a Covid-19 vaccine will be widely available by the second quarter of next year will have the biggest impact on their plans for 2021, while around 21 percent say the current one Increase in Covid cases biggest is affecting plans for next year.
However, these results vary by region. In yet another sign that the US and Europe continue to follow Asia’s path in and out of the pandemic, 12 of the 13 Asia Pacific CFOs who participated in the survey said the promise of a vaccine had the greatest impact on their plans for the next year. More than half of North America-based CFOs and just under half of CFOs in Europe said the same thing.
Which of the following has had the greatest impact on your company’s plans for 2021?
When asked what will have the greatest impact on planning for 2021, more CFOs are optimistic about a Covid-19 vaccine than fear an increase in the fourth quarter, but CFOs based in Asia are the most optimistic.
Q4 2020 survey by the CNBC Global CFO Council