The latest Global Economic Conditions Survey (GECS) by ACCA (Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants) reveals that confidence among finance professionals in Asia Pacific has declined sharply, reflecting ongoing economic uncertainty as 2025 approaches.
Confidence levels in the region have plummeted to their lowest since Q1 2020, primarily driven by concerns over a sluggish Chinese economy and potential U.S. tariff increases.
The report, which surveyed over 1,800 accountancy and finance professionals globally, indicates that businesses in Asia Pacific are increasingly wary of geopolitical risks and supply chain disruptions.
Despite the dip in confidence, the GECS report highlights a modest decline in the New Orders Index, which remains above historical averages, signalling some resilience in business activity.
However, capital expenditure and employment indices have both seen significant drops, raising concerns about the region’s economic growth momentum.
Talent Scarcity and Regulatory Challenges Top Risk Priorities
The GECS findings also underscore shifting risk priorities for businesses in Asia Pacific.
While economic risks remain the top concern for the second consecutive year, talent scarcity has emerged as a major challenge, surpassing regulatory and compliance risks.
The shortage of skilled professionals, particularly in finance and accounting, continues to pressure businesses, with retention and upskilling becoming critical imperatives for sustained growth.
“In today’s rapidly evolving economic landscape, businesses in Asia Pacific must navigate talent shortages, regulatory changes, and rising geopolitical uncertainties,” said Jonathan Ashworth, Chief Economist at ACCA, who authored the GECS report and ACCA’s recently published Global Economic Outlook 2025 report.
“Strategic workforce planning and investment in skills development will be key to building resilience in the face of economic headwinds.”
Impact on Malaysia: Navigating Economic and Workforce Challenges
As one of Asia Pacific’s key economies, Malaysia is not immune to the broader regional economic slowdown.
The sharp decline in confidence and capital expenditure could impact foreign investment flows into the country, particularly in sectors reliant on international trade.
Additionally, the continued economic uncertainty in China—a key trading partner for Malaysia— may put further pressure on exports and overall business sentiment.
Talent scarcity, a pressing issue highlighted in the GECS report, is particularly relevant for Malaysia.
With ongoing efforts to transition towards a high-value, knowledge-based economy, businesses will need to focus on workforce development and digital transformation to remain competitive.
The need for upskilling and reskilling is more critical than ever, as companies seek to bridge the talent gap in finance, accounting, and other high-demand sectors. Furthermore, easing cost pressures in the region offer some relief for Malaysian businesses.
The decline in operating costs may provide companies with some breathing room to stabilise operations and explore new growth strategies.
However, caution remains essential, as trade tensions and global economic shifts continue to pose risks in the coming year.
Global Economic Outlook: Cautious Optimism Amid Risks
The GECS Q4 2024 report aligns with ACCA’s Global Economic Outlook 2025, which projects a cautious yet resilient global economy.
While the U.S. economy has shown strong momentum entering 2025, growth in Europe remains fragile, weighed down by tax hikes and policy uncertainty.
Meanwhile, in Asia Pacific, easing cost pressures offer some relief to businesses, though persistent concerns about China’s economic trajectory and potential trade barriers could dampen recovery prospects.
Johor Corporation (JCorp) Chief Financial Officer Rozaini Mohd Sani said the global economy is set for steady growth at 3.2% in 2025, while Malaysia is expected to expand at a faster pace of 5%–5.5%, driven by strong domestic activity and rising investments in technology.
He added that the Group anticipates positive growth across its core sectors, particularly in Real Estate & Infrastructure, benefiting from the inflow of foreign direct investments, particularly in technology and AI, and creation of the Johor-Singapore Special Economic Zone.
Key risks and challenges include supply chain disruption, geopolitical uncertainties, and inflation.
However, proactive strategies in diversification, sustainability, and community engagement will help ensure resilience.
He added: “Climate change remains a long-term challenge, with some of our companies already experiencing the effects of extreme weather events.
In response, we are aligning with the new International Financial Reporting Standards (IFRS) sustainability standards S1 and S2.
These frameworks enable us to quantify risks related to climate events and devise strategies to mitigate them, ensuring our organisation remains resilient in the face of environmental uncertainties.”
As companies brace for 2025, ACCA remains committed to supporting finance professionals and businesses through insights, policy advocacy, and continuous learning initiatives to navigate economic challenges and drive sustainable growth. – BACALAHMALAYSIA.MY
- About ACCA – We are ACCA (the Association of Chartered Certified Accountants), a globally recognised professional accountancy body providing qualifications and advancing standards in accountancy worldwide. Founded in 1904 to widen access to the accountancy profession, we’ve long championed inclusion and today proudly support a diverse community of over 252,500 members and 526,000 future members in 180 countries.
