Record-Low Unemployment Supports Growth

Brazil’s unemployment rate dropped to 5.2%—the lowest since 2012—driven by nearly 1 million new jobs, mainly in services and public administration. This labor market strength boosts domestic consumption and supports business operations, despite persistent informal employment.

Supply Chain Complexity and Disruption

Post-Brexit border controls, customs procedures, and rising transport costs have made UK-EU supply chains more complex and vulnerable to delays. Businesses must invest in compliance, logistics expertise, and route diversification to mitigate risks and maintain trade flow.

Trade Surplus Decline and Export Weakness

Germany’s trade surplus narrowed sharply to €13.1 billion in November 2025, as exports fell 0.8% year-on-year. Exports to the US dropped 22.9%, while imports from China rose 8%, signaling shifting trade dynamics and risks for export-driven sectors.

Supply Chain Adjustments and Resilience

Trade barriers, especially from China and the US, are forcing Brazilian exporters to adapt supply chains, diversify destinations, and invest in logistics. These adjustments are crucial for mitigating risks and maintaining competitiveness in global markets.

Retaliatory Trade Measures Expand

China’s anti-dumping probe into Japanese semiconductor chemicals, alongside bans on cultural and seafood imports, signals a willingness to weaponize trade policy. These actions create uncertainty for Japanese exporters and global supply chains, especially in high-tech sectors.

Digital Governance Accelerates Project Delivery

India’s PRAGATI platform has resolved over 2,950 governance and infrastructure issues, expediting large-scale projects and reducing bureaucratic delays. This digital governance model improves inter-agency coordination, enhancing the ease of doing business and project execution timelines.

Oil Exports Under Sanctions Pressure

Despite sanctions, Iran exports up to 1.7 million barrels of oil daily, mainly to China at steep discounts. New US measures and domestic unrest threaten further disruptions, with potential to sharply impact global energy markets and pricing.

Shadow Fleet Enables Oil Exports

To circumvent sanctions and price caps, Russia employs a 'shadow fleet' of old tankers, shell companies, and non-Western insurers, maintaining oil exports above price caps. This parallel system heightens risks of regulatory breaches, insurance gaps, and environmental incidents for global traders.

UK Industrial Strategy and Investment Zones

The UK’s 10-year growth plan focuses on attracting investment in finance, life sciences, clean energy, and manufacturing. New investment zones, freeports, and public-private partnerships are designed to enhance competitiveness and supply chain innovation.

Logistics Modernization and Trade Connectivity

Major infrastructure projects, such as the DP World-Pipri freight corridor, are underway to enhance logistics, reduce costs, and improve regional trade connectivity. These developments are vital for supply chain resilience and Pakistan’s ambition to become a regional trade hub.

Corruption And Governance Challenges

State corruption remains a major concern, with high-profile investigations into tender fraud and police misconduct. Ongoing scandals undermine public trust, complicate regulatory compliance, and increase operational risks for international businesses seeking transparency and stability.

Societal Strains: Water, Energy, and Labor

Chronic water shortages, energy mismanagement, and rising unemployment compound Iran’s economic crisis. These systemic issues undermine productivity, increase social risk, and pose long-term challenges for sustainable business operations.

Supply Chain Resilience Amid Global Shocks

Australia’s efforts to diversify trade partners and strengthen supply chains are accelerating, driven by pandemic recovery, geopolitical tensions, and protectionist measures. Companies must reassess sourcing, logistics, and risk management to ensure operational continuity.

Digital Finance and Stablecoin Experimentation

Pakistan’s partnership with World Liberty Financial, linked to the Trump family, on a dollar-pegged stablecoin signals a bold shift toward digital finance. The initiative aims to streamline remittances and attract blockchain investment, but raises regulatory, ethical, and geopolitical concerns.

Labor Market Challenges and Mobility

Germany’s stagnant labor market and skill shortages are prompting policy reforms and new migration agreements, notably with India. Streamlined visas for healthcare and tech professionals are expected to support business operations and competitiveness.

Trade Policy Uncertainty and Tariff Risks

Ongoing negotiations over US tariffs and the potential cancellation of ECFA with China create uncertainty for Taiwan’s export-driven economy. Shifts in trade policy, tariff rates, and currency fluctuations could impact GDP growth, export competitiveness, and multinational investment strategies.

Multinational Security Guarantees Framework

Ukraine and over 30 allied countries are finalizing robust, legally binding security guarantees, including multinational force deployment and US-led ceasefire monitoring. This framework aims to deter future Russian aggression, stabilize Ukraine, and reassure investors.

EU-Mercosur Trade Agreement Approval

The historic EU-Mercosur trade deal, set for signing January 17, will eliminate tariffs on over 90% of bilateral trade, creating the world’s largest free trade zone. This will boost Brazilian exports by US$7 billion, especially in processed goods and agribusiness, but also impose stricter sustainability standards.

Supply Chain Vulnerabilities and Resilience

Germany’s supply chains remain exposed to geopolitical shocks, resource access issues, and energy constraints. The government is seeking joint international action to secure critical materials and modernize logistics, but disruptions persist, affecting manufacturing, exports, and cross-border operations.

Regional Funding and Infrastructure Gaps

Persistent underinvestment and complex funding formulas, especially in Wales and the North, continue to hinder infrastructure upgrades. Businesses face challenges in logistics, labour mobility, and regional development, with new government strategies aiming to address disparities.

Chronic Economic Instability and Reform Imperative

Pakistan faces persistent economic instability, marked by declining foreign investment, high debt, and inflation. Structural reforms, improved governance, and policy consistency are urgently needed to restore investor confidence and enable sustainable growth, directly impacting international business strategies.

Fiscal Policy and Tax Reform Uncertainty

South Africa faces potential tax increases, including VAT and digital economy taxes, to address revenue shortfalls. Fiscal consolidation and improved ratings have boosted investor sentiment, but persistent debt and policy uncertainty could impact future investment strategies and operational costs.

Energy Transition Drives High Costs

Germany’s shift away from Russian energy and nuclear power has resulted in persistently high energy prices and supply insecurity. This undermines industrial competitiveness, deters investment, and increases vulnerability in critical infrastructure, with significant implications for energy-intensive sectors and supply chains.

Climate and Energy Policy Uncertainty

US withdrawal from international climate bodies and evolving energy policies create regulatory uncertainty. This affects investment in clean energy and compliance for global firms, while domestic priorities shift toward solar and resilience.

Manufacturing Incentives and Domestic Value Addition

India’s 2026 budget and ongoing reforms focus on boosting domestic manufacturing, scaling up PLI schemes, and increasing value addition in sectors like semiconductors, EVs, and renewables. These measures aim to position India as a global manufacturing hub and reduce vulnerability to external shocks.

Inflation Moderates, But Remains Stubborn

US inflation held steady at 2.7% in December 2025, above the Fed’s 2% target. While price growth has cooled from post-pandemic highs, persistent shelter and food costs continue to pressure consumers and complicate monetary policy, impacting investment and operational planning.

Trade Imbalances and Export Disruptions

Ukraine’s 2025 trade deficit reached $44.5 billion, with exports down 3% and imports up 20%. Key export sectors—agriculture and metals—face declining volumes due to infrastructure attacks, logistical challenges, and increased competition, directly impacting foreign exchange earnings and supply chain reliability.

UK Trade Growth Lagging Global Average

UK trade growth is forecast at 2.3% annually, below the global average of 2.5%, due to slow expansion with the US and China. Deepening ties with the EU and other rule-based economies is seen as crucial for exporters and supply chain resilience.

Energy Transition: Nuclear Expansion and Supply Constraints

France’s €52 billion nuclear program aims to secure energy independence amid global hardware shortages and high copper prices. However, supply chain bottlenecks, reliance on Asian imports, and grid fragmentation pose significant risks for industrial operations and long-term investment planning.

US-EU Trade Frictions and Regulatory Clashes

The Turnberry Agreement set new tariff and investment terms, but implementation faces delays, digital regulation disputes, and Green Deal conflicts. Uncertainty over quotas, standards, and retaliatory measures complicates transatlantic business operations.

Remote Work and Regulatory Evolution

Remote work is now a permanent fixture in South Korea, prompting new legal frameworks and compliance needs. Consulting demand is rising for digital transformation, cybersecurity, and cross-border HR solutions, directly affecting multinational operations and talent mobility.

Financial Market Upgrades and Capital Flows

FTSE Russell’s upgrade of Vietnam to Secondary Emerging Market status in 2026 is expected to attract $3–8 billion in foreign investment. Stock market reforms, IPO surges, and improved legal frameworks are enhancing capital market depth, supporting business expansion and investor confidence.

Infrastructure-Led Investment Boom

India is experiencing a capital expenditure-driven investment surge, with nearly 80% of FY26 investments focused on infrastructure, power, metals, chemicals, and transport. This policy-driven growth is transforming the business landscape, though consumer demand remains subdued, impacting employment and sectoral balance.

Critical Minerals Strategy Gains Momentum

Australia is advancing government-backed initiatives to support rare earths and critical minerals, aiming to reduce China’s dominance in supply chains and strengthen partnerships with the US, EU, Japan, and South Korea, impacting global investment and technology flows.

Political Polarization and Governance Challenges

Internal political polarization, social media-driven disinformation, and civil-military dynamics affect policy continuity and governance. These factors create uncertainty for international investors and complicate long-term business planning in Pakistan.

Foreign Direct Investment Reboot

Thailand is prioritizing high-value FDI in sectors like high-tech, green infrastructure, and wellness tourism. Streamlined investment processes and improved incentives aim to reverse declining FDI, but success depends on legal reforms, transparency, and stable governance.