Lira volatility and inflation

Inflation remains elevated (31.5% y/y in February) and geopolitical shocks have forced tight liquidity; Turkey reportedly spent $12bn defending the lira. FX instability raises pricing risk, working-capital needs, hedging costs, and import affordability for energy and inputs.

Control a importaciones asiáticas

México endurece permisos y trazabilidad en acero y aplica aranceles de hasta 50% a más de 1,400 fracciones de países asiáticos sin TLC (incluida China). Reduce riesgos de triangulación, pero eleva costos de insumos y obliga a reconfigurar abastecimiento y compliance aduanero.

Foreign Investment Resilience Continues

France recorded 1,900 foreign investment decisions in 2025, up 2%, with 47,000 jobs expected. Continued investor interest supports industrial and digital expansion, but future inflows will depend on permitting speed, fiscal credibility, energy access and political stability ahead of 2027.

Managed thaw with China

Canada is selectively easing bilateral trade frictions: capped import permits allow 49,000 China-made EVs at 6.1% tariff (vs 106.1%), while China lowers canola seed tariffs to ~15% and lifts some “anti-discrimination” duties. Opportunities rise, but quotas, scrutiny and geopolitics heighten compliance risk.

Defence Spending Reshapes Industry

Canada has reached NATO’s 2% spending target with more than $63 billion in defence outlays, triggering major procurement and industrial expansion. New contracts in munitions, rifles, naval infrastructure and aerospace should lift manufacturing demand, domestic sourcing and allied supply-chain integration.

Electronics Hub Expansion Strains

Major electronics groups are expanding production and hiring aggressively, reinforcing Vietnam’s role in regional manufacturing diversification. Yet labor competition, supplier-development needs, and infrastructure bottlenecks could raise operating costs and challenge execution timelines for companies scaling capacity in key industrial clusters.

Energy system fragility and resilience

Repeated attacks hit substations, heat and power assets, causing outages across multiple regions. Protection works are scaling (over 90% completion in Sumy), yet the sector needs ~US$90.6bn over 10 years, impacting industrial uptime and capex planning.

Foreign Exchange Debt Pressures

Pakistan still faces heavy external repayments despite improved stabilization. Foreign-exchange reserves remain relatively thin against financing needs exceeding $25 billion, while a $1 billion Eurobond repayment underscores rollover dependence, sovereign risk sensitivity and persistent uncertainty for importers, lenders and foreign investors.

IMF Program and Fiscal Discipline

Pakistan’s delayed IMF review keeps $1 billion EFF and roughly $200 million climate financing at stake, while tax shortfalls of Rs428 billion and pressure to cut subsidies, spending and state-firm losses shape currency stability, sovereign risk and investor confidence.

Extraterritorial export-control compliance risk

China is expanding and operationalising export-control frameworks for dual-use items and critical inputs, with potential extraterritorial effects on third-country supply chains. Firms may face “choose-a-side” compliance dilemmas, higher documentation burdens and operational fragmentation.

Sanctions, export controls, and compliance

As geopolitical tensions intensify, Brazil-based operations face higher scrutiny on dual-use goods, energy trade flows, and counterparties connected to sanctioned jurisdictions. Firms should strengthen KYC, screening, and end-use controls, and monitor ad-hoc measures that can alter cross-border pricing and availability.

Transport Infrastructure Investment Push

Government is expanding infrastructure reform beyond crisis management, including port equipment upgrades, Bayhead Road rehabilitation and high-speed rail planning. These initiatives could lower freight costs and support trade flows, but execution risk remains significant for investors and supply-chain planners.

Energy revenue swings and fiscal strain

Budget stability remains tied to discounted hydrocarbon exports, exchange-rate dynamics and war-driven spending. Oil price shocks (e.g., Hormuz disruption) can boost receipts, yet deficits and rule changes persist, raising risks of higher taxes, payment delays, and reduced civilian procurement opportunities.

Energy Shock Lifts Costs

Middle East conflict has pushed oil near $108 per barrel and U.S. gasoline roughly 25% higher since late February, raising transport, petrochemical, and manufacturing costs. Elevated energy prices risk renewed inflation, margin compression, and broader supply-chain cost pass-through across industries.

Macro volatility: weak won, oil inflation

A sharply weaker won and oil-price shock are lifting import costs; Korea’s import price index rose 1.1% m/m in February, while USD/KRW tested post-crisis highs. The Bank of Korea is constrained on rate cuts, increasing financing and hedging complexity for foreign investors.

Data protection enforcement countdown

DPDP Rules implementation is tightening, with many multinationals’ GCCs still in early compliance stages ahead of key deadlines (transition to May 2026/27 depending on designation). Penalties can reach ₹250 crore per breach, pushing data inventories, vendor controls, and India-specific governance.

Energy And Freight Vulnerabilities Persist

Recent reporting highlights Australia’s exposure to imported fuel and external shipping shocks amid Middle East conflict and energy insecurity. Despite stronger trade partnerships, companies remain vulnerable to oil-price volatility, container disruptions, and higher transport costs across regional supply chains.

Research Mobility Supports Innovation

Planned negotiations for Australia to join Horizon Europe could unlock access to a €95.5 billion research program, improving talent mobility, R&D collaboration and commercialization prospects in quantum, clean technology, advanced computing, health, defence and critical-minerals-related industrial ecosystems.

Regional war escalates operational risk

Israel’s widened confrontation with Iran sustains elevated security, airspace, and business-continuity risk. Expect intermittent disruption to flights and critical infrastructure, higher war-risk insurance and security costs, tighter SLAs, and greater force-majeure risk in cross-border contracts.

Industrial Overcapacity Trade Backlash

China’s export-led industrial model is intensifying foreign backlash, especially in EVs, batteries, metals and machinery. US investigators are targeting alleged excess capacity, while persistent price competition and overseas expansion by Chinese firms increase tariff, anti-dumping and localization risks.

China Competition In Advanced Tech

Chinese chipmakers are advancing during the memory upcycle, while Huawei-led substitution is gaining ground under US controls. For Korean exporters, this threatens long-term market share, technology standards alignment and pricing power across semiconductors, batteries and adjacent advanced-manufacturing sectors.

Nuclear revival and power security

Paris is accelerating nuclear investment (new EPR2s and SMR push) to stabilize electricity prices and strengthen industrial competitiveness. However, project financing needs are large and timelines long, impacting energy‑intensive industries, grid-linked site selection, and long-term PPAs.

Energy security and Hormuz risk

Middle East conflict and Strait of Hormuz disruptions threaten Korea’s fuel and critical-gas imports. Qatar supplies about 14–15% of Korea’s LNG and ~65% of helium imports; outages push spot LNG prices higher, raising manufacturing costs and risking semiconductor and petrochemical interruptions.

Inflation distortions and tariff controls

Headline CPI remains negative for 11 months due to capped electricity (3.88 baht/unit) and cheaper fuel/food, while core inflation stays positive. Price controls and subsidy tools can change quickly if oil rises, complicating contract indexation and operating-cost forecasting.

Shipbuilding gains with strategic pressure

Korean yards are benefiting from tanker demand, US shipbuilding cooperation, and linked investment opportunities, including Hanwha’s Philadelphia expansion. Yet Chinese yards won 80% of February global newbuild orders, challenging Korea on price and delivery, including in LNG carriers.

Tech regulation via executive powers

Government amendments would give ministers broad powers to alter online safety and related laws via secondary legislation to respond to AI harms and potentially restrict under‑16 social media access. Business faces faster-moving compliance obligations, litigation risk, and uncertainty for platforms, advertisers and digital services.

Nearshoring with weaker certainty

Mexico still benefits from nearshoring and recorded a historic $40.871 billion in FDI in 2025, but long-term capital commitments are becoming harder. Companies now face uncertainty from annual-review risks, tariff volatility, and tougher North American sourcing requirements.

Fiscal Discipline Under Market Scrutiny

Investor concern over Indonesia’s 3% budget-deficit ceiling intensified after officials floated temporary flexibility if oil stays high. Markets reacted with equity losses, higher bond yields, and negative rating outlook pressure, increasing sovereign risk premiums and uncertainty for long-term capital allocation.

US trade pact reshapes access

New US–Indonesia reciprocal trade pact cuts threatened tariffs from 32% to 19% and grants zero tariffs for key exports. Indonesia offers wider US investment access and fewer mineral export barriers; ratification and US tariff-law uncertainty complicate planning.

High Rates Affordability Pressure

Inflation remains near 3% and borrowing costs stay elevated, with mortgage rates above 6% and energy prices rising amid Middle East tensions. Persistent affordability pressure weighs on US demand, raises financing costs, and complicates sales forecasts for consumer-facing and capital-intensive sectors.

Farm Labor Policy Turns Contradictory

Immigration crackdowns worsened agricultural labor shortages, pushing Washington to expand and cheapen H-2A hiring. With only 182 domestic applicants for more than 415,000 farm postings, agribusiness faces ongoing labor dependence, litigation risk, food-price pressures, and operational uncertainty across seasonal supply chains.

Mining push for critical minerals

Vision 2030 is scaling mining as a third pillar, citing $2.5tn mineral wealth and targeting SR240bn GDP contribution by 2030. Reforms include a mining investment law cutting taxes to 20% from 45% and digital licensing, creating openings in exploration, processing, and related industrial services.

Enerji fiyatları, cari açık riski

Türkiye’nin enerji ithalat bağımlılığı, Brent’in ~96 $/varil seviyelerine çıkmasıyla maliyet ve enflasyon kanalı üzerinden büyümeyi baskılıyor. Sürmekte olan şokta akaryakıt vergi “kayar ölçek” mekanizması tampon sağlasa da uzun sürerse cari açık ve fiyatlama riski yükselir.

Macroeconomic volatility and financing conditions

Trade-policy uncertainty and U.S. tariff threats can amplify peso volatility and widen funding spreads, impacting import costs, hedging needs, and capex decisions. Banks anticipate continued credit growth, but tighter risk pricing may favor larger, better-documented projects and suppliers with U.S.-linked revenues.

Infrastructure Bottlenecks Constrain Digital Growth

London’s infrastructure plan identifies 390,000 premises still lacking gigabit broadband, weaker mobile coverage, and data-centre growth constrained by land and power shortages. These bottlenecks may slow digital operations, cloud expansion, AI deployment, and location decisions for internationally connected businesses.

Defense spending and fiscal drift

Conflict-related outlays are likely to widen Israel’s fiscal deficit and reshape procurement priorities. JPMorgan estimates 2026 deficit rising to ~4.2% of GDP (about 9bn shekels extra). Expect increased defense/dual-use demand, potential tax adjustments, and budget reprioritization.