Accountant Confidence Sees Modest Rebound After Year-Long Dip
New data from the Q2 2025 Global Economic Conditions Survey (GECS), a joint report by ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants), offers a comprehensive look into the evolving global economic landscape through the eyes of financial professionals. The survey, which gathered 420 responses between June 3-23, 2025, from ACCA and IMA members worldwide , highlights a nuanced shift in sentiment, with rising geopolitical concerns now overshadowing traditional economic anxieties.
Global Economic Sentiment: A Tentative Rise Amidst Historical Weakness
Confidence among global accountants has experienced its first increase since Q2 2024, reaching its highest point since Q3 2024, as indicated by the latest GECS report. Despite this modest improvement, overall confidence remains historically weak. The report notes that while the New Orders and Capital Expenditure indices both declined, the former is currently at its historical average, and the latter is not significantly below it. Both indices are at levels broadly similar to those observed since the aftermath of Russia’s invasion of Ukraine. Encouragingly, the Employment Index showed improvement and is currently not far below its historical average. This suggests that despite lingering caution, the global economy is not facing an imminent major downturn, even with heightened uncertainty.
Regional Dynamics: A Mixed Bag of Confidence
The regional analysis of confidence levels reveals a diverse picture. Western Europe and North America both saw some increase in confidence. In North America, sentiment among U.S.-based accountants improved in Q2. However, confidence in the region remains depressed by historical standards, with other key indicators at low levels. This cautious outlook in North America is partly attributed to rising import tariffs and policy uncertainty , as well as tight monetary policy and the risk of slowing U.S. growth. The Capital Expenditure Index in North America remained largely unchanged but is historically weak. The New Orders Index fell and is now significantly below its historical average. Despite a slight easing in the proportion of accountants reporting increased operating costs, these costs remain historically elevated.
Western Europe experienced another moderate gain in confidence, partly aided by a further improvement in the UK from its record low in Q4 2024. Nevertheless, confidence in the region is still low by historical standards. The New Orders Index saw a small fall but is only modestly below its historical average. The Capital Expenditure Index slightly declined, while the Employment Index saw a moderate rise, though the latter remains very low historically. Notably, the proportion of Western European accountants reporting increased operating costs fell materially, yet remains very elevated historically.
In stark contrast to the West, Asia Pacific experienced a sharp fall in confidence, negating the gains made in Q1 2025. This deterioration is largely attributed to the worsening backdrop for global trade, especially in light of major changes in U.S. trade policy and the threat of large additional increases in U.S. import tariffs. Confidence in Asia Pacific is now meaningfully below its historical average. The New Orders Index also saw a large fall, although it remains above its average. Both Capital Expenditure and Employment indices are historically weak, with the latter falling very sharply.
Among other regions, Africa saw a sharp improvement in confidence, reaching its highest level since Q1 2022. This rise in 2025 may reflect a confluence of factors, including improvements in inflationary pressures, declining central bank interest rates, and a recent weakening of the U.S. dollar against some regional currencies. Despite a sharp decline in the New Orders Index, it remains at a healthy historical level. The Capital Expenditure and Employment indices both gained and are meaningfully above their historical averages.
The Middle East experienced a small rise in confidence, which remains at a relatively favorable historical level. The New Orders Index also saw a similar rise, remaining historically very high. Survey responses indicated that the escalation of the conflict between Israel and Iran did not appear to have a negative impact on sentiment. South Asia, however, saw another very large fall in confidence, leaving it at a historically low level. Regional tensions and the rise in U.S. import tariffs, along with the threat of further increases, are likely significant factors weighing on sentiment.
Cost Pressures and Inflationary Trends
Globally, the proportion of respondents reporting “increased costs” declined in Q2 2025 to its lowest level since Q4 2021, just before Russia’s invasion of Ukraine. Despite this decline, it remains high by historical standards. Regional divergences persist. While Western Europe saw a material fall in accountants reporting increased operating costs, it remains very high from a historical perspective, partly due to elevated but moderating cost pressures in the UK. In North America, the proportion eased slightly in Q2 but remains materially above its historical average after a surge in Q1, increasing the risk that firms may attempt to raise prices in the coming months. Outside of Western economies, cost pressures in Asia Pacific, Africa, the Middle East, and South Asia do not appear elevated by historical standards.
Concerns about costs among Chief Financial Officers (CFOs) rose again in Q2 and remain historically elevated.
Rising Concerns: From Economic Fears to Geopolitical Instability
A significant finding of the Q2 2025 GECS report is the emergence of geopolitics as the top global risk priority for the first time in the survey’s history. This marks a shift from previous quarters where economic concerns dominated. Inflation, recession, and interest rate fears now share the second-highest risk priority with regulatory and compliance risks. While talent scarcity and cybersecurity remain important, they have become slightly less prominent, suggesting that external shocks are currently taking precedence in accountants’ risk assessments. The report indicates a pivot from Q1’s economic anxiety to a more nuanced and fragmented view of the risk landscape. Accountants are increasingly worried about their organizations’ internal resilience, including governance gaps, cost fragility, workforce strain, and cultural and digital readiness. Comments from respondents highlight the impact of rising tariffs, currency volatility, and pricing pressure as underestimated threats, eroding margins and disrupting supply chains.
Corporate Stress Indicators and Access to Finance
Concerns globally that customers might go out of business eased slightly in Q2, and concerns about suppliers’ businesses failing also declined. Neither of the GECS “fear” indices appear worrying by historical standards at the current juncture. However, these aggregate numbers mask notable regional movements. Concerns about customers going out of business declined in North America, Western Europe, and Africa, but rose sharply in Asia Pacific and South Asia, appearing very elevated by historical standards in the latter two regions, possibly driven by changes in U.S. trade policy.
Global problems accessing finance and securing prompt payment both increased in Q2, but both series remain at encouraging historical levels. Regionally, the proportion of accountants reporting problems securing prompt payment fell meaningfully in North America and Africa, was largely unchanged in Western Europe, but rose to varying degrees in Asia Pacific, the Middle East, and South Asia.
Outlook and Policy Implications
The GECS report suggests that global growth has generally proved quite resilient in the first half of 2025, despite the significant increases in U.S. tariffs and a massive rise in trade policy uncertainty. While the key GECS indicators do not suggest a global economy in rude health, particularly with confidence remaining low, they also do not point to a major downswing being imminent. Nevertheless, the report anticipates some slowing in global growth over the second half of 2025. This slowing is likely to be driven by higher tariffs potentially pushing up U.S. inflation and the combined weight of uncertainty and tariffs on the U.S. and global economies. The extent of this slowdown will largely depend on developments in the U.S. economy, its trade policy, and broader geopolitical events.
With higher tariffs expected to push up U.S. inflation, the Federal Reserve is likely to remain cautious about monetary easing, even as financial markets anticipate around two quarter-point rate cuts by year-end. Meanwhile, as changes in U.S. trade policy impact growth globally, further monetary easing from many other central banks seems probable in the coming months. The report underscores the critical role of accounting professionals as “connective tissue” in navigating these complex and fragmented risks, emphasizing the need for foresight, agility, and integrated governance to build resilience in an increasingly geopolitically driven world.