KARACHI - Escalating global inflation is the biggest challenge to businesses struggling to recover from the economic downturn, according to the latest Global Economic Conditions survey of finance professionals by ACCA (the Association of Chartered Certified Accountants). The survey of more than 2,300 accountants in March 2011, the largest ever undertaken by ACCA, shows that for the first time more than half (51 percent) reported problems with rising operating costs, making this the most commonly cited business challenge. Only 31 percent had reported rising costs as being a problem when the question was asked in the fourth quarter of 2010. While they reported that there were still businesses opportunities, these increased costs made it more difficult for accountants to spot opportunities for both growth and cost-cutting for the businesses they advise. Although the worst problems were reported in Malaysia and Singapore, this trend was not confined to the faster-growing emerging markets but was reported with only marginally lesser intensity in the more sluggish developed economies. Responses suggest that the global economic recovery picked up speed again in early 2011, after briefly going into reverse at the end of 2010 - but that conditions remain fragile. Accountants reported that both demand for goods and services and cash flow conditions have continued to improve around the world. While this has generally lead to a more stable outlook for employment and investment in developed countries, accountants in the developing world reported slightly less investment in staff and more layoffs as businesses come to terms with the weaker-than-expected recovery. In the developing world, members saw an opportunity in exports, relying mostly on strong supply chain relationships, investments in quality, and innovation.