ISLAMABAD: Geopolitical instability, rising energy prices and persistent cost pressures are threatening the global economic outlook, despite signs of resilient business activity and improving new orders across the Asia-Pacific region, according to a survey by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).
Thank you for reading this post, don't forget to subscribe!The Global Economic Conditions Survey (GECS) for the third quarter of 2026 found that the Asia-Pacific New Orders Index improved for the second consecutive quarter, approaching its highest level in the survey’s history. Capital expenditure and employment indicators also strengthened, moving closer to their long-term averages.
However, business confidence among finance professionals in the region declined sharply, reversing almost three-fifths of the gains recorded in the second quarter. Although confidence remained slightly above its historical average, renewed geopolitical tensions and higher energy prices were identified as potential factors behind the decline.
Geopolitical instability emerged as the leading concern for 24.1% of finance professionals surveyed in Asia-Pacific, compared with 18.4% of respondents globally. Talent and skills shortages, along with supply-chain disruptions, were also cited more frequently in the region than in the global survey.
Cost pressures remained elevated, with 62% of Asia-Pacific respondents reporting higher operating costs in the third quarter, compared with the survey’s long-term average of 52%. Meanwhile, 41% expected interest rates in their respective countries to rise over the following three months, up from 30% in the second quarter and 24% in the first quarter.
Globally, nearly 70% of accountants reported rising operating costs, while almost half anticipated interest-rate increases over the next three months, compared with 42% in the previous quarter.
ACCA Chief Economist Jonathan Ashworth said economic indicators in Asia-Pacific remained encouraging, with the region benefiting from the global investment boom in artificial intelligence (AI).
However, he warned that further increases in energy prices and the anticipated effects of a strong El Niño weather event could pose significant downside risks to economic growth. A substantial slowdown in AI-related investment could also undermine the outlook.
Alain Mulder, Senior Director for Europe Operations and Global Special Projects at IMA, said the global economy was facing conflicting forces, with AI investment supporting growth while higher energy prices, inflation and government bond yields added to economic pressures.
The survey cautioned that sustained increases in operating costs could force businesses to pass higher expenses on to consumers, potentially weakening demand and increasing the likelihood of further interest-rate hikes by major central banks.
The findings highlight the growing challenge facing businesses and policymakers as they seek to sustain economic growth amid geopolitical uncertainty, inflationary pressures and changing investment trends.
