0
0
The fallout from the Middle East conflict continues to impact
the results from the ACCA and IMA Global Economic Conditions Survey (GECS). The
survey was conducted between 3 and 17 June, before the renewed fighting and
resumption of the U.S. naval blockade
Over three-quarters of accountants globally reported increased operating costs in
Q2 – above the previous record set in the aftermath of Russia’s invasion of Ukraine –
amid soaring commodity prices and supply chain disruptions resulting from the
conflict. Strikingly, 83% of CFOs experienced increased costs, following a record-
breaking rise of over 20 percentage points from Q1. This is close to series peaks
recorded in 2022 and 2023.
Despite soaring costs, there was some recovery in confidence among accountants
globally in Q2, from what was close to a record low in Q1. While they remain quite
downbeat by historical standards, the improvement likely reflects the relative
resilience of the global economy and signs at the time of the survey of movement
towards a potential resolution of the conflict, which may have reduced fears of
worst-case scenarios.
That said, declines in the Global New Orders, Capital Expenditure and Employment
indices point to some slowing in global growth, likely reflecting headwinds from
increased private sector caution, rising inflation, and tighter-than-expected
monetary policy, although they do not appear to be signalling a major economic
slowdown.
Confidence among accountants remains weak by historical standards in North
America and Western Europe, but after a sharp recovery in Q2 is now meaningfully
above average in Asia-Pacific. While the region is very exposed to developments in
the Middle East, hopes of a potential resolution of the conflict and the relative
resilience of the global economy have likely been factors boosting sentiment, as well
as the global AI boom, of which the region’s exporters are major beneficiaries.
Economic pressures returned as accountants' top risk priority in Q2 2026 (22%),
ahead of geopolitical instability (20%) and cybersecurity (14%). Respondents
described how understanding today's risk landscape extends beyond traditional
economic cycle management, pointing to the converging effects of prolonged wars,
rising cybercrime and policy uncertainty. AI featured prominently, with comments
focusing on sustainable value, cyber resilience and accountability.
Alain Mulder, Senior Director, Europe Operations & Global Special Projects at IMA
said: ‘The AI boom is providing major support to the global economy and financial
markets, but developments in the Middle East over coming months will be crucial. If
progress can be made in resolving the conflict, that would clearly be supportive for
global growth as we progress through the second half of 2026. But downside risks
would quickly build if there were a return to major hostilities and surge in energy
prices.
Jonathan Ashworth, Chief Economist, ACCA, said: ‘Sharply rising costs were
unsurprisingly a major issue for firms in Q2. If they increasingly try to pass these on to
the consumer, this would significantly raise the risk of policy tightening by the world’s
major central banks. That said, policymakers will be hoping for favourable
developments on the diplomatic front, and a return of oil prices to around pre-crisis
levels, potentially allowing them to sit on their hands for the rest of 2026.’
Ashworth concluded: ‘Despite some improvement in confidence, accountants
globally remain very cautious, likely in part reflecting the uncertain and
unpredictable operating environment which has become the “new normal” in recent
years’.
