Volatile Raw Materials Impact Logistics

Rapid shifts in metal prices and unpredictable demand have made logistics a critical business function for Swedish mining and manufacturing. Companies are adapting supply chain strategies to manage risk and maintain operational resilience in a volatile market.

Transformation of Labor Market Dynamics

Israel's labor market has shifted from Palestinian to foreign workers, with over 61,000 new permits issued in 2025. This structural change impacts construction, agriculture, and services, raising concerns about labor standards, costs, and long-term workforce stability.

Food Self-Sufficiency and Export Shift

Indonesia will halt rice and sugar imports in 2026, relying on robust domestic production and reserves. The government aims to export rice and corn, marking a strategic shift toward food sovereignty and new export opportunities for agribusiness and logistics.

Labour Market Strains and Skills Shortages

Unemployment in the UK has risen to 5.1%, the highest in nearly a decade, with youth joblessness and skills gaps posing challenges for business operations. Companies must adapt workforce strategies to mitigate risks from AI adoption and demographic shifts.

Infrastructure and Logistics Enhancements

Investments in port facilities, transportation networks, and digital infrastructure improve Israel's logistics capabilities. Enhanced infrastructure supports efficient supply chains, reducing costs and transit times for international trade.

Escalating US-China Trade Rivalry

The US-China economic relationship remains the most consequential global business risk, with ongoing tariffs, selective decoupling, and technology export controls. These measures disrupt supply chains, accelerate China’s tech self-sufficiency, and force multinationals to reassess market and sourcing strategies.

Zero-Duty Access For Indian Exports

From January 2026, Australia will eliminate all tariffs on Indian goods under the ECTA, boosting bilateral trade and supply chain integration. This enhances Australia’s role in Indo-Pacific commerce and diversifies market access, especially for labor-intensive sectors.

Foreign Direct Investment Trends and Incentives

Ukraine is actively seeking foreign direct investment, offering incentives and public-private partnerships, especially in reconstruction and defense industries. Investment climate remains volatile, with opportunities contingent on security guarantees and ongoing reforms.

Energy Transition and Nuclear Expansion

France’s €52 billion commitment to new nuclear reactors underscores its strategy for energy security and decarbonization. However, hardware shortages, dependence on Asian imports, and rising energy nationalism across Europe create operational and investment uncertainties for energy-intensive industries and infrastructure projects.

Supply Chain Resilience and Infrastructure

Border instability, logistics costs at 15–16% of GDP, and reliance on imported components expose Thailand’s supply chains to disruption. Calls for infrastructure upgrades, automation, and regional energy cooperation are central to enhancing resilience and lowering operational risks.

US-China Relations Remain Volatile

Ongoing tensions and policy reversals in US-China economic relations continue to disrupt trade flows, investment decisions, and technology transfers. Businesses face persistent risk from tariffs, regulatory changes, and unpredictable bilateral negotiations.

Sanctions, Export Controls, and Geopolitics

The US continues to deploy sanctions and export controls as tools of foreign policy, targeting countries like Iran, Russia, and Venezuela. These measures disrupt global energy, technology, and financial flows, increasing compliance risks and operational challenges for international companies.

Currency Fluctuations and Economic Policies

Volatility in the Thai baht and shifts in monetary policy impact trade competitiveness and investment returns. Exchange rate stability is crucial for pricing strategies and financial planning of businesses engaged in cross-border operations.

Defense Technology as Economic Anchor

Israel’s defense-tech sector has become a key diplomatic and economic asset, attracting major foreign investment and strategic partnerships, especially from Europe. This shift bolsters Israel’s global influence but also ties its economic resilience to the volatile defense sector.

Regulatory and Legal Risks

The evolving regulatory landscape in Russia, including tightened controls on foreign businesses and increased scrutiny, poses compliance challenges. Legal uncertainties can deter foreign direct investment and complicate contract enforcement.

Geopolitical Relations and Trade Agreements

Indonesia's active participation in regional trade agreements like the RCEP enhances market access but also exposes domestic industries to increased competition. Geopolitical relations with major powers influence trade policies and investment flows, necessitating strategic geopolitical risk management.

EU and Denmark Strengthen Arctic Security

Denmark, with EU support, is investing billions in Arctic defense—new naval vessels, surveillance drones, and satellite capacity—to counter US and Russian ambitions. This military buildup affects logistics, shipping routes, and risk calculations for businesses operating in the region.

Persistent Inflation and Policy Uncertainty

Despite strong GDP growth, inflation remains elevated, fueled by tariffs, a weaker dollar, and policy ambiguity. Businesses face higher input costs and pricing pressures, with monetary policy divided between supporting growth and containing inflation, complicating planning for investment and operations.

Property Sector and Domestic Demand Weakness

Despite robust export performance, China’s domestic economy faces persistent headwinds from a prolonged property slump, weak consumer demand, and local government debt. This structural imbalance may limit growth and affect sectors reliant on domestic sales, with implications for both local and foreign businesses.

Semiconductor Sector Faces New Pressures

China’s anti-dumping probe into Japanese chip-making chemicals and export controls on related materials heighten uncertainty for Japan’s semiconductor industry, a global supply chain linchpin, with potential ripple effects on tech investment and production worldwide.

Environmental Regulations

Stricter environmental policies impact manufacturing and resource extraction sectors. Compliance costs and sustainability requirements are increasingly important for multinational companies aligning with global ESG standards.

EU Accession Reforms Accelerate

Ukraine’s economic support package is tied to EU accession reforms, including governance, anti-corruption, and regulatory alignment. Progress on these reforms will enhance market access, legal predictability, and integration into European supply chains, benefiting international investors.

Infrastructure Development Initiatives

Large-scale infrastructure projects, including the Suez Canal expansion and new industrial zones, enhance Egypt's logistics capabilities and trade facilitation. Improved infrastructure attracts multinational corporations and supports Egypt's role as a regional trade hub, impacting global supply chain efficiency.

Regulatory Instability and Economic Reforms

Iran’s government has responded to unrest by replacing the central bank governor and promising reforms. However, regulatory unpredictability, inflation, and currency collapse undermine investor confidence and complicate compliance for foreign businesses.

Stagnant Growth and Deindustrialization Risks

Germany faces its third year of economic stagnation, with GDP declining by 0.2% in 2024. High taxes, energy costs, and regulatory burdens have triggered capital outflows and job losses, particularly in manufacturing, threatening Germany’s status as Europe’s industrial engine.

Infrastructure Investment Pipeline Expansion

India’s government has launched a Rs 17 lakh crore PPP project pipeline with 852 projects, spanning roads, power, ports, and railways. This initiative provides medium-term investment visibility, boosts private sector participation, and underpins India’s long-term competitiveness in trade and logistics.

Regulatory and Fiscal Policy Evolution

Ongoing reforms in GST, tax policy, and fiscal decentralization are shaping India’s investment climate. States are seeking greater fiscal autonomy and infrastructure funding, while regulatory changes continue to impact business operations, compliance, and long-term strategic planning.

Sanctions Severely Disrupt Energy Revenues

Western and Ukrainian sanctions have driven Russian oil and gas revenues down by 35%, forcing deep discounts and rerouting through opaque channels. This undermines Russia’s fiscal stability and creates volatility for global energy markets and supply chains.

Regulatory Environment and Business Reforms

Ongoing regulatory reforms aimed at improving the business climate, including tax incentives and streamlined procedures, enhance Israel's attractiveness for foreign investors. Transparent governance and innovation-friendly policies support sustainable economic growth and integration into global markets.

Sustainability Standards and Market Access

Environmental regulations and sustainability standards are increasingly shaping Brazil’s export competitiveness. The end of the Soy Moratorium raises deforestation concerns, potentially threatening market access, especially in the EU, where new trade deals include strict environmental provisions.

Sustainability and Regulatory Challenges

The EU-Mercosur deal and global buyers increasingly require traceability and environmental compliance. Brazil’s exporters must adapt to stricter anti-deforestation laws and sustainability standards, which may limit access for non-compliant producers and increase operational costs.

Persistent Attacks on Energy Infrastructure

Russian strikes on Ukrainian energy assets have caused widespread blackouts, affecting millions and disrupting industrial, transport, and municipal operations. These attacks threaten supply chains, increase operational risks, and require urgent investment in resilient infrastructure.

Foreign Direct Investment Rebounds

FDI pledges hit a record $36 billion in 2025, up 4.3%, with actual investments surging 16.3%. Political stabilization and the APEC summit spurred greenfield investments, especially from the U.S. and EU, strengthening Korea’s role in global supply chains and advanced industries.

Regional Geopolitical Instability Escalates

Saudi Arabia faces heightened geopolitical risks from escalating conflicts in Yemen and broader Middle East rivalries, notably with the UAE and Iran. These tensions threaten vital trade routes, energy infrastructure, and investor confidence, impacting cross-border operations and supply chains.

Digital Sovereignty and Tech Regulation

France is advancing policies to enhance digital sovereignty, including stricter data protection and support for domestic tech firms. This regulatory environment affects international tech companies' operations, cross-border data flows, and investment strategies in the European digital market.

Labor Market and Immigration Policies

Evolving immigration policies and labor market dynamics affect talent availability in key industries. Skilled labor shortages and policy reforms impact sectors like technology, healthcare, and manufacturing. Businesses must strategize workforce planning and leverage immigration pathways to sustain growth and innovation.