The Middle East tensions impact the global financial industry, market confidence falls to a new low since the COVID-19 pandemic | Lianhe Zaobao

The Middle East military conflict has caused global financial professionals to feel increasingly anxious, leading to a drop in their confidence in the economy to levels close to those during the COVID-19 pandemic. As a regional financial and logistics hub, Singapore faces particularly significant pressure. The latest "Global Economic Conditions Survey" report released by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) shows that the business sentiment in the financial industry fell to a new low since 2020 in the first three months of this year. This shift reflects the industry's growing awareness of the closer relationship between geopolitical, economic, and technological risks. The ongoing military conflict in the Middle East exacerbates the pressures facing the global economy, with heightened concerns about financial conditions, supply chains, and energy prices. The report states that Singapore is at the center of these pressures. As a major regional financial and logistics hub, Singapore is particularly vulnerable to rising bond yields, a strengthening dollar, and deteriorating global financial conditions. Additionally, as an important aviation and freight center, Singapore directly faces the impacts of global trade disruptions, including trade flows related to the Middle East. Further Reading Confidence of our companies improves, profit and growth expectations strengthen Singapore's business optimism index has declined for two consecutive quarters, with a significant drop in selling price indicators ACCA Singapore's Regional Manager, Liang Junran, said: "For a city like Singapore, which is built on open trade, financial stability, and global connectivity, these risks require financial professionals to have new strategic vigilance. The survey results indicate that rising cost pressures, tightening financial conditions, and declining confidence among chief financial officers are signals that business leaders cannot ignore The report also shows that 33% of respondents in the Asia-Pacific region consider geopolitical instability to be their biggest risk factor, while on a global scale, an average of 25% view it as the greatest risk. Cybersecurity ranks second, with an average of 17% of global respondents feeling uneasy about it. This reflects the increasing threats faced by economies like Singapore, where digitalization is widespread. Companies faced significant cost pressures in the first quarter of this year, with the proportion of respondents believing that operating costs are rising reaching a new high since the third quarter of 2022, following Russia's invasion of Ukraine. Due to recent increases in energy and other essential commodity prices, coupled with ongoing supply chain pressures, companies may face even greater cost pressures in the coming months