41% of Asia-Pacific finance professionals expect interest rates to rise; regional business confidence declines
News Desk
ISLAMABAD: Geopolitical instability, rising energy prices and persistent cost pressures are emerging as key risks to global economic growth, despite resilient business activity and improving new orders in Asia-Pacific, according to a survey by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).
The Global Economic Conditions Survey (GECS) for the third quarter of 2026 shows 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 towards their historical averages.
However, confidence among accountants in the region fell sharply during the quarter, reversing almost three-fifths of the increase recorded in Q2. While confidence remained slightly above its long-term average, renewed geopolitical tensions and higher energy prices may have contributed to the decline.
Geopolitical instability was identified as the leading risk by 24.1% of finance professionals surveyed in Asia-Pacific, compared with 18.4% globally. Talent and skills shortages, alongside supply-chain disruptions, were also cited more frequently in the region than worldwide.
Cost pressures remain elevated, with 62% of Asia-Pacific respondents reporting higher operating costs in Q3, compared with the survey’s long-term average of 52%. Meanwhile, 41% expect interest rates in their respective countries to rise over the next three months, up from 30% in Q2 and 24% in Q1.
Globally, nearly 70% of accountants reported rising operating costs, while almost half anticipated higher interest rates over the next three months, up from 42% in Q2.
ACCA Chief Economist Jonathan Ashworth said Asia-Pacific’s economic indicators remained encouraging, with the region benefiting from the global artificial intelligence (AI) investment boom. However, he cautioned that further increases in energy prices and the expected impact of a powerful El Niño weather event posed downside risks. A significant slowdown in AI investment could also weigh on growth.
Alain Mulder, Senior Director, Europe Operations and Global Special Projects at IMA, said the global economy was being pulled in opposing directions, as AI investment supported growth while higher energy prices, inflation and government bond yields created mounting pressure.
The survey warns that sustained price increases could force businesses to pass higher costs on to consumers, weaken demand and increase the likelihood of further interest-rate hikes by major central banks.
