Energy infrastructure expansion accelerates

Brazil is expanding grid capacity through major transmission auctions. A new auction plans R$11.3 billion in investments across 2,069 km of lines in 13 states, while earlier awards added R$3.3 billion. Improved power evacuation supports industry, data centers, mining, and regional manufacturing investment.

Logistics Corridors Gaining Depth

New multimodal infrastructure around Navi Mumbai airport, JNPA, and the Western Dedicated Freight Corridor is improving prospects for faster sea-air and rail-port connectivity. Over time, this could reduce logistics costs, ease congestion, and support export-oriented manufacturing, warehousing, and time-sensitive supply chains.

Ports and Rail Bottlenecks Persist

South Africa’s weak freight system remains a major commercial constraint. Cape Town, Durban and Ngqura rank 391st, 398th and 404th of 405 ports globally, limiting gains from rerouted shipping and raising delays, inventory costs, and supply-chain uncertainty for exporters and importers.

LNG Leverage and Volatility

Higher LNG prices and disrupted Qatari supply have strengthened Australia’s regional energy leverage, but cyclones and domestic policy uncertainty complicate the outlook. Exporters benefit from elevated prices, while manufacturers and energy users face spillover cost pressures and supply volatility.

Infrastructure and Housing Bottlenecks

Delayed national housing and infrastructure plans are constraining construction, utilities connections, transport sequencing, and grid readiness. The lack of a cross-government timetable is reducing certainty for investors, slowing project delivery, and affecting site selection and logistics planning.

Energy Import Shock and Rationing

Egypt’s monthly energy bill rose from $1.2 billion in January to $2.5 billion in March, prompting fuel price increases, early shop closures and partial remote work. Businesses face higher operating costs, possible rationing, and elevated risks to industrial continuity.

Inflation and Slow Growth Squeeze

Mexico’s macro backdrop is becoming less supportive for business. March inflation accelerated to 4.59%, above target, while analysts highlight weak growth and cautious monetary easing. Rising fuel and food costs could pressure wages, consumer demand, financing conditions and operating margins in 2026.

US-China Trade Escalation Risk

Renewed Section 301 probes, reciprocal Chinese investigations, and unresolved tariff disputes keep bilateral trade unstable. Even after partial tariff rollbacks, direct US-China trade continues shrinking, raising compliance costs, rerouting flows through third countries, and increasing volatility for exporters, importers, and investors.

Regional Trade Frictions Inside SACU

Import restrictions by Namibia, Botswana and Mozambique on South African produce are disrupting regional food supply chains and undermining SACU and AfCFTA commitments. With 17% of South Africa’s $15.1 billion agricultural exports going to SACU in 2025, policy unpredictability is rising.

Rupee Weakness Raises Import Costs

The rupee’s slide toward record lows near 95 per dollar, combined with higher hedging costs and RBI intervention, is lifting the landed cost of oil, electronics, machinery and inputs. Businesses face tighter margins, pricier financing and more volatile treasury management.

US tariffs reshape exports

US trade barriers continue to hurt Brazilian exporters. March exports to the United States fell 9.1%, while first-quarter shipments dropped 18.7%, and roughly 22% of exports remain tariff-affected. Machinery makers also face 25% duties, pressuring margins, market access, and diversification strategies.

Fiscal Strain Lifts Market Risk

US public debt near $39 trillion, annual interest costs around $1 trillion, and possible war spending and tariff refunds are intensifying fiscal concerns. A wider deficit could push yields higher, weaken bond demand, and increase volatility in funding markets central to global business finance.

China Pivot Deepens Transaction Dependence

Russia’s trade reorientation toward Asia is deepening reliance on China-linked payments, logistics, and demand. This supports export continuity but concentrates counterparty and settlement risk, especially for foreign firms exposed to yuan clearing, secondary sanctions, and politically sensitive intermediaries.

Green Hydrogen and Clean Power

Finland’s abundant clean electricity, low population density and hydrogen innovation are reinforcing its appeal for energy-intensive industry. Emerging hydrogen and electrification projects could support decarbonized manufacturing and export opportunities, though execution depends on grid capacity, infrastructure build-out, and offtake certainty.

Green Compliance Reshaping Industry

EU carbon and sustainability rules are forcing Vietnamese manufacturers to accelerate emissions reporting, renewable power use, and traceability upgrades. Industrial parks host 35–40% of new FDI and over 500 parks now face growing investor demand for green infrastructure and clean electricity.

IMF-Driven Energy Cost Reset

Pakistan’s IMF programme is forcing cost-reflective power pricing, with subsidies capped at Rs830 billion and another tariff rebasing due January 2027. Rising electricity and gas costs will pressure manufacturers, exporters, margins, and investment decisions, especially in energy-intensive sectors.

Regional War Disrupts Operations

Israel’s war exposure now extends beyond Gaza to Iran, Lebanon and Yemen, raising the risk of sudden escalation, infrastructure disruption and emergency restrictions. Businesses face heightened continuity planning demands, wider force-majeure exposure, and greater uncertainty for investment timing, staffing, and cross-border execution.

Judicial Reform and Legal Certainty

Judicial reform is undermining confidence in contract enforcement, commercial dispute resolution and regulatory predictability. Lawmakers are already considering corrective changes after concerns that inexperienced judges and shorter procedures weakened business confidence, while surveys show rule-of-law concerns rising among the main obstacles to operating and investing in Mexico.

Nickel Supply Chain Cost Pressure

Nickel smelters face tighter ore quotas, rising domestic ore prices, sulfur costs linked to Middle East disruptions, and weather-related logistics constraints. These pressures are increasing procurement uncertainty and could squeeze margins, delay shipments, and disrupt downstream manufacturing and export commitments.

Cross-Border Hydrogen Networks Expand

Despite delays, new hydrogen links are emerging through Hamburg’s HH-WIN network and the first Dutch connection to Germany’s core hydrogen grid, targeted for 2027. These corridors improve long-term supply optionality, industrial clustering, and import-based decarbonization opportunities for internationally exposed manufacturers.

Nearshoring expands outside capital

Investment is spreading beyond the Greater Metropolitan Area, with more than 20 FDI projects outside it and rising free-zone inflows to regional locations. This broadens labor pools and site options, but also increases dependence on regional infrastructure, skills and supplier readiness.

Coalition Reform Execution Risk

The CDU/CSU-SPD coalition is under heavy pressure to deliver tax, labor, pension, and health reforms before summer. With approval low and internal differences unresolved, policy execution risk is high, leaving companies exposed to abrupt rule changes or prolonged regulatory drift.

Digital Infrastructure Investment Accelerates

Indonesia is positioning itself as a regional AI and data-center hub through localization pressure, lower land and power costs, and major commitments from Microsoft, DAMAC, and Indosat-NVIDIA. Opportunity is significant, but reliable clean power, water, and governance remain decisive constraints.

Weak Consumption Tempers Market Demand

French household goods consumption fell 1.4% month on month in February, while growth forecasts for the first two quarters were cut to 0.2%. Softer domestic demand raises caution for exporters, retailers, and investors exposed to French consumer markets.

Public Finance Limits State Support

Unlike prior crises, Paris appears to have limited capacity for broad corporate cushioning if external shocks intensify. Businesses should expect more selective intervention, tighter subsidy conditions, and greater exposure to market financing, energy volatility, and domestic demand softness.

Won and Capital Market Volatility

Foreign investors pulled record sums from Korean securities, including about $29.78 billion from stocks in March, while the won weakened and daily FX swings widened. Elevated market volatility raises hedging costs, complicates capital planning, and can deter portfolio and direct investment decisions.

US Tariff Negotiations Uncertainty

India’s unsettled interim trade framework with the United States leaves tariff exposure fluid after Section 301 probes and legal reversals. Exporters in textiles, chemicals and engineering face planning uncertainty, while investors must price in shifting market-access terms and compliance risk.

Energy Security Drives Policy

Geopolitical shocks and oil above Indonesia’s budget assumptions are accelerating energy policy shifts, including US$23.63 billion in Japan-linked deals, US$10.2 billion in Korean MoUs, and a stronger focus on solar, geothermal, LNG, and mineral downstreaming with mixed fossil-renewable implications.

B50 Mandate Alters Palm Trade

Indonesia will launch B50 biodiesel on 1 July, aiming to cut fossil fuel use by 4 million kiloliters and save Rp48 trillion. However, stronger domestic palm demand could divert crude palm oil from exports, affect levy financing, and tighten feedstock availability.

China Plus One Acceleration

Persistent geopolitical friction and supply-chain concentration risk are accelerating manufacturing diversification toward Vietnam, Mexico, Taiwan, and ASEAN. China remains central to industrial ecosystems, but companies are increasingly adopting dual-sourcing, regional redundancy, and selective decoupling strategies to reduce exposure to tariff, sanctions, and disruption risks.

Regulatory Reforms Improve Entry

Authorities are amending housing and real-estate laws to simplify procedures, reduce compliance burdens, and improve legal consistency. Combined with efforts to clear blocked investment projects, reforms should support foreign investors, though execution risk and uneven local implementation remain important operational considerations.

Semiconductor and Industrial Policy Push

Japan continues directing strategic support toward semiconductors and advanced manufacturing, while higher rates may raise corporate borrowing costs. For foreign firms, incentives remain attractive, but execution risk is rising as policymakers balance technology security, supply-chain resilience and fiscal constraints.

Sanctions Relief Negotiation Volatility

Ceasefire and nuclear talks have reopened debate on phased sanctions relief, frozen assets and limited waivers, but policy remains highly unstable. Companies face abrupt compliance, payment and contract risks as U.S., Iranian and allied positions remain far apart.

Buy Canadian Industrial Policy

Federal and provincial Buy Canadian procurement measures are reshaping market access and supplier strategies, while drawing U.S. criticism before CUSMA talks. The policy supports domestic manufacturing, defence and construction, but may increase compliance burdens and bilateral friction.

Logistics Modernization With Gaps

Manufacturing growth is pushing India’s logistics system toward multimodal, digitized networks under PM GatiShakti and the National Logistics Policy. Costs have eased to roughly 7.8–8.9% of GDP, but last-mile bottlenecks, uneven state execution, and hinterland connectivity still constrain reliability.

Buy Canadian Procurement Frictions

Canada’s new procurement rules prioritizing domestic content in contracts above C$25 million are becoming a bilateral flashpoint. The U.S. has flagged the policy as a trade barrier, raising risks for foreign bidders, public-sector suppliers, and firms reliant on integrated North American procurement markets.