The Middle East conflict has driven global business costs to record levels as surging commodity prices and supply-chain disruptions intensify pressure on companies, according to a survey conducted by the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants (IMA).
In the survey, titled the Global Economic Conditions, more than three-quarters of accountants reported higher operating costs in the second quarter of 2026 (2Q26).
“Among chief financial officers, 83% experienced cost increases, a survey record and a jump of more than 20 percentage points from 1Q26,” the survey showed.
The survey was conducted between June 3 and 17, before renewed fighting and a further escalation in the conflict later that month.
Despite the cost surge, global confidence recovered from near-record lows in the first quarter, although sentiment remained subdued by historical standards.
Declines in the survey’s new orders, capital expenditure and employment indices pointed to slower global growth amid rising inflation, cautious private-sector spending and tighter-than-expected monetary policy.
ACCA chief economist Jonathan Ashworth warned that businesses passing higher costs to consumers could increase the risk of further interest-rate tightening by major central banks.
“Sharply rising costs were unsurprisingly a major issue for firms in 2Q,” he said, adding that diplomatic progress and a return of oil prices to pre-crisis levels could allow policymakers to keep rates unchanged for the rest of 2026.
Economic pressures were the leading risk cited by respondents at 22%, followed by geopolitical instability at 20% and cybersecurity at 14%.
Asia-Pacific confidence rebounded above its historical average, supported by resilient global activity and demand linked to the artificial intelligence boom, although the region remains exposed to energy-market and geopolitical risks.
“In Malaysia, businesses are facing higher fuel, logistics and raw-material costs, particularly import-dependent companies and small and medium enterprises.
“The domestic economy nevertheless expanded by 5.8% in the second quarter, while inflation eased to 1.9% in June,” the survey showed.
Malaysia allocated RM54.7 billion for subsidies, assistance and incentives in 2026, with expenditure expected to rise as global developments increase subsidy costs.
ACCA portfolio head for Maritime Southeast Asia Andrew Lim said Malaysia remained comparatively resilient, but businesses should prepare for continued volatility.
“While the economy has shown resilience and inflation remains manageable, firms will need to stay agile as external risks continue to affect operating conditions,” he said.
Lim said contained inflation, steady domestic activity and targeted policy support provided a buffer, but companies would still need to manage costs carefully rather than expect a rapid return to normal.
