Global Confidence Plummets as War Reshapes Economic Risks

WASHINGTON and MONTVALE, N.J. – April 15, 2026 – The outbreak of war in the Middle East has sent a shockwave through the global business community, causing accountant confidence to plummet to near-pandemic lows and fundamentally reshuffling the landscape of perceived risks, according to a new report.

The Q1 2026 Global Economic Conditions Survey (GECS), published today by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), reveals a stark downturn in sentiment among the world's finance professionals. The survey, conducted between March 3-19, captured the immediate reaction to the conflict's eruption, which has become the fourth major shock to the global economy in just six years.

A Crisis of Confidence

The decline in confidence was both sharp and severe. The survey's main index fell to its third-lowest level on record, placing sentiment on par with the uncertainty seen at the outset of the COVID-19 pandemic in early 2020. For Chief Financial Officers (CFOs), confidence is at its weakest since that same period, underscoring the gravity of the current situation.

This collapse in sentiment follows a period of fragile stability. While confidence remained historically low through late 2025, the global economy had entered 2026 showing signs of resilience, buoyed in part by an AI-driven technology boom and favorable financial conditions. However, the outbreak of hostilities in the Middle East, which escalated during the survey period, effectively erased that nascent optimism.

The report also highlights a resurgence of intense cost pressures. Nearly 70% of respondents reported an increase in operating costs, the highest proportion since the third quarter of 2022, when businesses were grappling with the economic fallout from Russia's invasion of Ukraine. This signals a return to an inflationary environment that many had hoped was receding.

Geopolitics and Cyber Threats Eclipse Economic Fears

Perhaps the most significant finding from the survey is a dramatic reordering of risk priorities. For only the second time since the risk survey was introduced in 2023, traditional economic worries are not the primary concern for finance professionals.

"International and geopolitical instability" surged to the top of the list, cited by 25% of respondents globally as their main worry. This concern was even more pronounced in the Asia Pacific region, where a third of accountants flagged it as the top risk. This marks a profound shift, displacing economic pressures which fell to third place at 16%.

Wedged between them is the persistent and growing threat of cyber risks, which ranked second. "This shift does not suggest a reduction in economic worries, but a growing recognition of how converging forces shape the macro landscape," said Rachael Johnson, Head of Risk Management and Corporate Governance at ACCA. "Respondents point to AI and cyber threats amplifying other risks, and emphasize how eroding trust—in institutions, information and leadership—is becoming a defining feature of operating in today’s world."

The heightened concern over cybersecurity, particularly acute in Western Europe, reflects a world where geopolitical conflict is increasingly waged on digital battlefields, posing direct threats to corporate infrastructure and data integrity.

The Economic Ripple Effect

The conflict's immediate economic impact has been felt most acutely in energy markets and supply chains. The near-closure of the Strait of Hormuz—a vital chokepoint for 20% of global oil and LNG supplies—caused Brent crude prices to spike past $120 per barrel in March. While a two-week ceasefire brought some relief, prices remain elevated, fueling the cost pressures reported by accountants.

"The global economy entered 2026 in decent shape, but enormous uncertainty currently clouds the outlook," said Alain Mulder, Senior Director, Europe Operations & Global Special Projects at IMA. "Inflation is already beginning to rise sharply, and downside risks to growth will mount the longer energy and other commodity prices remain elevated."

Despite the grim outlook on confidence, the survey contained some encouraging underlying data, likely reflecting the pre-conflict economic momentum. The Global New Orders Index registered a solid increase to its historical average, and the Global Employment Index also improved. This suggests that before the war, businesses were seeing healthier demand and were more willing to hire, a resilience that will now be severely tested.

A Precarious Path for Policymakers

The convergence of a major supply shock with persistent inflation creates an incredibly challenging environment for global policymakers. Central banks, which have spent years trying to tame post-pandemic inflation, now face a stagflationary dilemma reminiscent of the 1970s.

"Major supply shocks create very tricky situations for policymakers," noted Jonathan Ashworth, Chief Economist at ACCA. "After years of above target inflation, central bankers need to tread very carefully so as to not let the inflation genie out of the bottle."

This challenge is visible in the recent actions of major central banks. The US Federal Reserve, the European Central Bank, and the Bank of England all held interest rates steady in March, wary of tightening financial conditions further amidst a major geopolitical crisis. However, they have also been forced to revise their inflation forecasts upward, acknowledging the impact of the energy price surge.

Compounding the problem is the limited room for government intervention. "Very high government debt levels also constrain the room for major fiscal support in many countries, even in advanced economies," Ashworth added. With fiscal buffers depleted, the ability to cushion economies from the shock is severely hampered.

The survey makes it clear that finance leaders are now operating in a new paradigm, where geopolitical acumen is as critical as financial expertise. As the world watches the fragile situation in the Middle East, the prospects for global economic stability in 2026 hang precariously in the balance.

"Developments in the Middle East over coming weeks and months will be absolutely key for global economic prospects over the remainder of 2026," Ashworth concluded.