ACCA warns of fragile global growth outlook as Middle East businesses navigate uncertainty

Global economic growth is expected to remain steady but subdued in 2026, with downside risks rising amid geopolitical tensions, trade uncertainty, and financial market pressures, according to the latest Global Economic Outlook report by ACCA (the Association of Chartered Certified Accountants).

The report says the global economy is projected to grow by around 3%, broadly in line with 2025, supported by easier monetary policy, fiscal stimulus in major economies, and continued momentum in artificial intelligence (AI) investment. However, it warns that the overall environment remains volatile and unpredictable.

Resilient growth but rising downside risks

ACCA’s third annual outlook notes that growth in 2025 proved more resilient than expected, despite significant trade disruptions and policy uncertainty. That resilience is expected to carry into 2026, though risks are now skewed more heavily to the downside.

For Middle East businesses, the findings highlight the need for long-term planning, financial resilience, and agile decision-making, given the region’s close links to global trade flows, capital markets, and investment trends.

Experts caution over market and policy risks

Former IMF chief economist Ken Rogoff, who was interviewed for the report, described the global economy as “solid but not exciting”, warning that current market pricing may not fully reflect the scale of uncertainty ahead.

He cautioned that there is a risk of a significant stock market correction within the next three years, even if markets continue to rise in the short term. Rogoff also warned that certain US policy directions could produce negative economic consequences later in the decade.

US growth to lead G7, but backdrop remains fragile

Jonathan Ashworth, Chief Economist at ACCA, said the base-case scenario points to continued expansion in 2026, driven by looser policy settings and AI-led investment.

“The US is expected to be the fastest-growing G7 economy, with policymakers likely to intensify pro-growth measures ahead of mid-term elections,” Ashworth said. “But this remains a fragile global backdrop, with heightened geopolitical uncertainty, risks of renewed trade tensions, and concerns around central bank independence.”

Implications for the Middle East

Kush Ahuja, Head of Eurasia and Middle East at ACCA, said the outlook underscores the region’s exposure to external economic and geopolitical shifts, even as Gulf economies pursue diversification and transformation agendas.

He said finance leaders must strengthen risk management, scenario planning, and strategic decision-making, particularly as organisations invest in AI, digital transformation, and long-term growth programmes.

“The ability to interpret global economic signals and translate them into resilient business strategies will be critical,” Ahuja said.

Three key themes shaping 2026 outlook

The ACCA report identifies three major themes likely to shape the global economy this year:

• AI developments: Evidence that AI investment is boosting productivity could stabilise sentiment, while doubts about its impact could increase the risk of a market correction.

• Advanced economy bond markets: A sharp rise in government bond yields could increase debt-servicing costs and slow growth, driven by debt sustainability concerns or political pressure on central banks.

• Global trade trends: Ongoing effects of higher US tariffs and the risk of renewed trade escalation remain key watchpoints.

Business leaders surveyed for the report also highlighted AI, geopolitics, trade, the green transition, and cybersecurity as top issues shaping their 2026 outlook.

Ashworth added that in a rapidly changing environment, understanding the interaction between economic, political, geopolitical, and technological forces will be essential for both businesses and policymakers.