The fallout from the Middle East conflict continues to impact
\nthe results from the ACCA and IMA Global Economic Conditions Survey (GECS). The
\nsurvey was conducted between 3 and 17 June, before the renewed fighting and
\nresumption of the U.S. naval blockade
\nOver three-quarters of accountants globally reported increased operating costs in
\nQ2 \u2013 above the previous record set in the aftermath of Russia\u2019s invasion of Ukraine \u2013
\namid soaring commodity prices and supply chain disruptions resulting from the
\nconflict. Strikingly, 83% of CFOs experienced increased costs, following a record-
\nbreaking rise of over 20 percentage points from Q1. This is close to series peaks
\nrecorded in 2022 and 2023.
\nDespite soaring costs, there was some recovery in confidence among accountants
\nglobally in Q2, from what was close to a record low in Q1. While they remain quite
\ndownbeat by historical standards, the improvement likely reflects the relative
\nresilience of the global economy and signs at the time of the survey of movement
\ntowards a potential resolution of the conflict, which may have reduced fears of
\nworst-case scenarios.
\nThat said, declines in the Global New Orders, Capital Expenditure and Employment
\nindices point to some slowing in global growth, likely reflecting headwinds from
\nincreased private sector caution, rising inflation, and tighter-than-expected
\nmonetary policy, although they do not appear to be signalling a major economic
\nslowdown.
\nConfidence among accountants remains weak by historical standards in North
\nAmerica and Western Europe, but after a sharp recovery in Q2 is now meaningfully
\nabove average in Asia-Pacific. While the region is very exposed to developments in
\nthe Middle East, hopes of a potential resolution of the conflict and the relative
\nresilience of the global economy have likely been factors boosting sentiment, as well
\nas the global AI boom, of which the region\u2019s exporters are major beneficiaries.<\/p>\n
Economic pressures returned as accountants' top risk priority in Q2 2026 (22%),
\nahead of geopolitical instability (20%) and cybersecurity (14%). Respondents
\ndescribed how understanding today's risk landscape extends beyond traditional
\neconomic cycle management, pointing to the converging effects of prolonged wars,
\nrising cybercrime and policy uncertainty. AI featured prominently, with comments
\nfocusing on sustainable value, cyber resilience and accountability.
\nAlain Mulder, Senior Director, Europe Operations & Global Special Projects at IMA
\nsaid:\u00a0\u2018The AI boom is providing major support to the global economy and financial
\nmarkets, but developments in the Middle East over coming months will be crucial. If
\nprogress can be made in resolving the conflict, that would clearly be supportive for
\nglobal growth as we progress through the second half of 2026. But downside risks
\nwould quickly build if there were a return to major hostilities and surge in energy
\nprices.
\nJonathan Ashworth, Chief Economist, ACCA, said: \u2018Sharply rising costs were
\nunsurprisingly a major issue for firms in Q2. If they increasingly try to pass these on to
\nthe consumer, this would significantly raise the risk of policy tightening by the world\u2019s
\nmajor central banks. That said, policymakers will be hoping for favourable
\ndevelopments on the diplomatic front, and a return of oil prices to around pre-crisis
\nlevels, potentially allowing them to sit on their hands for the rest of 2026.\u2019
\nAshworth concluded: \u2018Despite some improvement in confidence, accountants
\nglobally remain very cautious, likely in part reflecting the uncertain and
\nunpredictable operating environment which has become the \u201cnew normal\u201d in recent
\nyears\u2019.<\/p>\n","protected":false},"excerpt":{"rendered":"
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