The global economic recovery has slowed down again in early 2012, according to a worldwide survey of finance professionals who fear that governments which are already living beyond their means may struggle to get it back on track through extra public spending.

The Global Economic Conditions Survey (GECS) for the second quarter of 2012, undertaken by ACCA (Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants), cautioned that growth across the world's most developed economies has stalled once again and that the global economy is as fragile as it has ever been in the last three years. The global survey of 2,700 professional accountants, now well into its third year, suggests that hints of a stronger recovery in early 2012 were mostly down to misplaced optimism, and that most of the gains made at the time have since been reversed.

China's slowing economy has dominated the survey findings this quarter, although ACCA and IMA stress that there are few signs of the hard landing many commentators had feared. That said, both confidence and investment are falling despite increasing business opportunities. Survey editor Manos Schizas, Senior Economic Analyst with ACCA said: "The point now is to see how far and how fast the Chinese slowdown will travel. Our members in Africa tend to feel any fallout from Asia fairly quickly, and there could be implications for other markets which trade with China."

According to the survey, the flip side of the Chinese slowdown is a recovery for the US economy, where investment is on the rise and confidence is high, despite significant potential problems.

With growth faltering once again, the finance professionals surveyed by ACCA and IMA are rethinking their attitudes towards public spending. However, the policy choice is not quite so simple. Accountants working in major markets such as the US, China, Russia, Malaysia, or Pakistan – economies relied on by others for trade and export opportunities – believe that fiscal stimulus by their governments is already unsustainable. It was in only a few markets that respondents believed that their governments could spend both robustly and sustainably – places such as Singapore, or the UAE.

Manos Schizas said: "Finance professionals who responded to this survey were quite at ease with the prospect of austerity until mid-2010. Then the recovery failed to take off and everything changed. Relatively few believe their governments can make austerity work, even in countries such as Ireland where it has been executed quite successfully. Except this time there is a limit to what even countries with strong credit ratings and no liquidity constraints, such as the US and China, can do."

The Caribbean has lagged the rest of the Americas and indeed the global sample substantially in terms of business confidence in early 2012.

Only 18 per cent of respondents in the region reported confidence gains in the last three months, against 28 per cent in late 2011. Perceptions of the global recovery also appear to have shifted, with fewer respondents seeing deterioration or stagnation (58 per cent, down from 63 per cent) and more respondents (nine per cent up from three per cent) now telling ACCA and IMA that it's just too hard to tell where the global economy is going.

Further analysis suggests that, over the last three quarters, respondents in the Dominican Republic appear to have been the most confident in the region and that across the Caribbean small businesses have been surprisingly resilient. On the other hand, ACCA and IMA believe on the basis of their analysis that finance professionals in the public sector have experienced a significant loss of confidence in the second quarter of 2012.

Despite the general loss of confidence, Caribbean businesses have seen some improvements in the business environment over the last nine months: access to finance appears to be easing steadily and capital spending is becoming more resilient. Businesses are managing to cut costs and are seeing opportunities in niche markets, while the last quarter has also seen a surge in the number of respondents citing innovation as a source of opportunities for their organisations.