Cost pressures surge in Q2 globally, while Malaysia remains resilient amid uncertainty

• Confidence among accountants rises from depressed level, but remains fragile
• Global headwinds raise costs, but Malaysia's economic fundamentals remain steady

KUALA LUMPUR, July 27 (Bernama) -- The ongoing conflict in the Middle East continues to weigh on the global economy, according to the latest ACCA and IMA Global Economic Conditions Survey (GECS), conducted between 3 and 17 June 2026, before the renewed escalation later that month.

More than three-quarters of accountants worldwide reported higher operating costs in Q2 2026, surpassing the previous record following the escalation of the war in Ukraine, driven by rising commodity prices and supply chain disruptions. Among CFOs, 83% experienced increased costs, close to the highest levels recorded in 2022 and 2023. 

Despite mounting cost pressures, global confidence improved from the near-record lows seen in Q1, reflecting the resilience of the global economy and, at the time of the survey, optimism over potential diplomatic progress. However, weaker new orders, capital expenditure and employment indicators suggest global growth is slowing amid persistent inflation, geopolitical uncertainty and tighter financial conditions. 

Economic pressures ranked as accountants' top business risk in Q2 (22%), followed by geopolitical instability (20%) and cybersecurity (14%). Respondents also highlighted the growing importance of AI, with discussions centred on sustainable value creation, cyber resilience and accountability. 

Jonathan Ashworth, Chief Economist at ACCA, said: "Sharply rising costs were unsurprisingly a major issue for firms in Q2. If businesses increasingly pass these costs on to consumers, the risk of further monetary policy tightening would rise. Despite the improvement in confidence, accountants remain cautious as uncertainty continues to define the global operating environment."  

What it means for Malaysia 

For Malaysia, higher logistics, fuel and raw material costs continue to affect businesses, particularly import-dependent sectors and SMEs. Nevertheless, the country's economic fundamentals remain resilient. Inflation moderated to 1.9% in June 2026, while the economy expanded by 5.8% in Q2, supported by resilient domestic demand and stronger manufacturing, mining and services activity. The Government has also continued to cushion external pressures through RM54.7 billion in subsidies, assistance and incentives in 2026 to help stabilise prices and ease the burden on households.  

Andrew Lim, Portfolio Head, Maritime Southeast Asia, ACCA, said: "Malaysia's outlook remains comparatively resilient, supported by contained inflation, steady domestic demand and targeted policy measures. However, businesses should remain agile and manage costs carefully as global volatility is likely to persist." 

Read GECS Q2 2026 here. 

SOURCE: ACCA  

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--BERNAMA