The fallout from the Middle East conflict continues to impact the results of the quarterly Global Economic Conditions Survey (GECS), conducted by ACCA (Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants). The survey was conducted between June 3-17, before the renewed fighting and resumption of the U.S. naval blockade.
Amid soaring commodity prices and supply chain disruptions, more than three-quarters of accountants globally reported increased operating costs in Q2—rising above the previous record set in the aftermath of Russia’s invasion of Ukraine. The proportion of North American accountants reporting increased costs jumped by more than 10 percentage points to 74% in Q2, well above the series average.
Strikingly, 83% of CFOs globally 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 of movement towards a potential resolution of the conflict at the time of the survey, 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.”
“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,” said Jonathan Ashworth, Chief Economist, ACCA. “That said, policymakers will be hoping for favorable 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.”
Photo credit: Freepik
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Tags: conflict, economy, employment, Iran, middle east, war
