ISLAMABAD (Dunya News) – Geopolitical tensions, rising energy prices and persistent inflation are emerging as major threats to global economic growth and business confidence, according to a survey by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).
The survey found that financial professionals across Asia-Pacific and other regions were increasingly concerned about economic uncertainty, supply chain disruptions, rising operating costs and shortages of skilled workers.
According to the ACCA report, 24.1% of financial professionals in Asia-Pacific identified geopolitical instability as a major risk to businesses and the economy.
Rising operating costs were another significant concern, with 62% of respondents in the region reporting an increase in business expenses. The trend could put pressure on corporate profitability, investment decisions and consumers’ purchasing power.
The survey also indicated that 41% of financial professionals in Asia-Pacific expected interest rates to rise over the following three months. Globally, around half of respondents expressed similar concerns.
The report noted that central banks could face pressure to raise interest rates further if inflation and energy prices remained elevated. Higher borrowing costs could make business financing more expensive and weigh on investment.
Rising costs squeeze businesses
Globally, around 70% of accountants surveyed reported increasing business costs, reflecting higher expenditure on energy, raw materials, production and other operating requirements.
Businesses passing these additional costs on to consumers could drive up prices for goods and services, potentially weakening consumer demand.
Supply chain disruptions, shortages of skilled workers and uncertainty over the global economic outlook were also identified as obstacles to business expansion.
Despite declining business confidence in Asia-Pacific, new orders improved for a second consecutive quarter, offering a positive signal for regional economic activity.
AI investment offers growth opportunities
The report highlighted global investment in artificial intelligence (AI) as a potential driver of economic growth in Asia-Pacific.
Investment in AI and advanced technologies could improve productivity, operational efficiency and innovation. However, businesses would need to invest in workforce skills and ensure access to technology to realise these benefits.
The survey also identified further increases in energy prices and the potential effects of El Niño weather patterns as risks to the global economy.
Higher energy costs could increase expenses for industries and transport operators, while adverse weather conditions could disrupt agricultural production and food supplies, adding to inflationary pressures.
The findings underscore the challenges facing businesses as geopolitical uncertainty, cost pressures and technological change reshape the global economic environment.