Infrastructure and Regulatory Bottlenecks

Industrial development faces delays due to spatial planning (RTRW) and infrastructure issues, including electricity and logistics. Resolving these bottlenecks is critical for accelerating foreign investment and improving supply chain efficiency in key sectors.

Labor Market and Saudization Policies

The Saudization policy mandates increased employment of Saudi nationals in the private sector, impacting labor costs and operational strategies for foreign businesses. This affects workforce planning and investment decisions.

Regulatory Environment and Compliance

Enhanced regulatory scrutiny in areas such as data privacy, cybersecurity, and environmental standards is increasing compliance costs for businesses. Companies must navigate complex legal frameworks to avoid penalties and maintain market access, influencing investment and operational decisions.

Monetary Policy and Inflation Management

Turkey has reduced inflation from over 42% to just above 30% in 2025, with further declines targeted for 2026. Tight monetary policy and structural reforms have stabilized the economy, but high inflation and currency volatility remain key risks for investors and supply chain planners.

Indigenous Economic Participation

Growing emphasis on Indigenous economic empowerment is influencing business operations and investment frameworks. Policies promoting Indigenous-owned enterprises and partnerships enhance social license to operate and open new market opportunities, aligning with global ESG trends and stakeholder expectations.

Currency Fluctuations and Monetary Policy

The Thai baht's volatility and monetary policy decisions influence trade competitiveness and investment returns. Currency risks must be managed strategically by businesses engaged in import-export and foreign investment activities.

Regulatory Environment and Bureaucratic Hurdles

Complex regulatory frameworks and bureaucratic inefficiencies increase compliance costs and delay business operations. These challenges discourage foreign direct investment and complicate market entry strategies for multinational companies.

Public Investment Fund Global Expansion

The Public Investment Fund (PIF) led global sovereign wealth fund activity in 2025, investing $36.2 billion, mainly in digital and tech sectors. PIF’s assets now exceed $1.15 trillion, with a strategic pivot toward global investments supporting Saudi Arabia’s economic transformation.

Defense Industry Expansion and NATO Relations

Turkey is rapidly expanding its defense sector, with over $7.1 billion in exports in 2024 and localization rates exceeding 80%. Ongoing disputes over F-35 and S-400 systems, and potential reintegration into NATO defense projects, directly impact foreign investment and technology transfer.

Comprehensive Crypto Regulatory Shift

The UK is transitioning from a ‘crypto hub’ narrative to a full regulatory regime, with new rules set for October 2027. This shift favors established financial players, raises compliance costs, and will reshape the fintech and digital asset landscape for international investors.

Resilient Economic Growth Amid Global Headwinds

Vietnam’s GDP grew by 8% in 2025, outperforming regional peers despite US tariffs and global uncertainties. Export-led growth, manufacturing strength, and political stability underpin robust performance, though high openness leaves the economy vulnerable to external shocks and trade policy changes.

Supply Chain Resilience Efforts

Global companies are reconfiguring supply chains to reduce dependence on China due to geopolitical risks and pandemic disruptions. This includes nearshoring and diversification to Southeast Asia, affecting China's role as the world's manufacturing hub.

Sustainable Energy and Rural Electrification

Indonesia targets nationwide electrification by 2030, with significant progress in rural areas. The Desa Listrik program and new installations promote social equity and unlock economic opportunities, supporting investment in energy, technology, and rural development.

Infrastructure And Energy Sector Strains

Despite vast oil and gas reserves, Iran faces energy mismanagement, rolling blackouts, and water shortages. Infrastructure decay and unreliable utilities disrupt industrial operations, logistics, and supply chain reliability for domestic and foreign businesses.

US-China Strategic Rivalry Intensifies

Escalating trade tensions, technology export controls, and counter-sanctions between the US and China are reshaping global supply chains, investment flows, and regulatory environments. The Taiwan issue and legal-diplomatic confrontations further heighten risks for multinational firms operating in both markets.

Post-Brexit Trade Adjustments

The United Kingdom continues to navigate complex trade realignments post-Brexit, impacting customs procedures and regulatory standards. Businesses face increased compliance costs and delays, influencing supply chain efficiency and international investment decisions. Ongoing negotiations with the EU and other trade partners remain critical for market access and tariff arrangements.

Currency Stability Amid Economic Pressures

The Egyptian pound has shown relative stability, with the dollar trading around 47.3–47.7 EGP. However, a rising current account deficit and reliance on foreign reserves signal underlying vulnerabilities, affecting import costs, profit repatriation, and business risk assessments for international firms.

Energy Transition Faces Supply Constraints

France’s accelerated shift to electrification and decarbonization is challenged by hardware shortages, grid bottlenecks, and mineral dependencies. Energy supply tensions and infrastructure delays threaten industrial competitiveness and reliability for international operations.

Energy Sector Challenges

Despite vast oil and gas reserves, Iran's energy sector faces underinvestment and technological constraints due to sanctions and limited foreign partnerships. This restricts production capacity and export potential, impacting global energy markets and supply chain reliability.

International Security Guarantees for Ukraine

Ukraine’s allies, including the US, France, and UK, are finalizing robust security guarantees and peacekeeping arrangements. These legal commitments aim to deter future Russian aggression and stabilize the business environment, crucial for investor confidence and long-term operations.

Geopolitical Tensions with Neighbors

Turkey's complex relations with neighboring countries, including Syria, Greece, and Armenia, create regional instability. These tensions affect cross-border trade routes, energy transit, and foreign investment confidence, potentially disrupting supply chains and increasing operational risks for businesses engaged in the region.

Regulatory and Governance Reforms

Ongoing reforms aimed at improving transparency and business climate are critical for attracting investment. However, implementation challenges and corruption concerns remain, affecting investor confidence and business operations.

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.

Infrastructure Development and Logistics

Investments in transport and logistics infrastructure enhance France's connectivity and supply chain efficiency. Upgrades in ports, rail, and road networks facilitate trade flows, impacting distribution strategies and regional economic integration.

Major Gulf Investments Reshape Economy

Qatar’s $3.5 billion initial payment for a $29.7 billion coastal development signals a surge in Gulf investment. These mega-projects offer hard currency and jobs, but raise questions about long-term economic sustainability and the government’s reliance on asset sales.

Major Infrastructure Investments Underway

Significant public funding is being directed toward infrastructure, notably the £3 billion Lower Thames Crossing and expanded broadband rollout. These projects aim to boost productivity, alleviate supply chain bottlenecks, and attract investment, but execution risks remain.

US Tariffs and Trade Tensions

The imposition of US tariffs, particularly on automotive and manufactured goods, is straining South Africa’s export sectors. These measures threaten jobs, especially in manufacturing, and create uncertainty for investors reliant on US market access, complicating trade and investment strategies.

Monetary Policy Shifts and Dollar Volatility

The Federal Reserve’s cautious approach to rate cuts, persistent inflation concerns, and political pressure are driving market uncertainty. Dollar weakness and financial repression are impacting global investment strategies, cross-border financing, and commodity pricing, with ripple effects across emerging markets.

Sweeping Tariffs Disrupt Global Trade

The United States implemented a 10% global tariff and reciprocal duties up to 50%, triggering extreme market volatility, retaliatory measures, and a major shift in trade patterns. These tariffs have increased costs, complicated supply chains, and forced businesses to reassess sourcing and investment strategies.

Industrial Investment Hurdles Persist

Regulatory delays in spatial planning and infrastructure bottlenecks continue to impede industrial zone development. Despite increased foreign investment, unresolved issues in permitting, utilities, and logistics pose risks to manufacturing and supply chain expansion.

Geopolitical Tensions with China

Vietnam's ongoing territorial disputes with China in the South China Sea create significant geopolitical risks. These tensions impact maritime trade routes, increase military expenditures, and may disrupt supply chains, affecting foreign investment confidence and regional stability.

Financial Services Sector Evolution

London remains a global financial hub but faces challenges from regulatory changes and competition from EU financial centers. Firms are adapting by diversifying services and exploring new markets, impacting capital flows and international investment patterns.

Defense Industry Expansion and Localization

Turkey’s defense industry localization rate has surpassed 80%, with exports exceeding $7.1 billion in 2024. Ongoing investments in advanced military technology and joint production projects bolster its strategic autonomy, impacting foreign investment and international partnerships.

AI and Technology-Driven Competitiveness

Rapid advances in AI and digitalization are boosting China’s productivity and global influence. The government’s support for tech IPOs and AI adoption is reshaping value chains, but also intensifies competition and export controls, impacting cross-border technology flows and business strategies.

Regulatory Environment and Business Climate

Regulatory reforms aimed at improving ease of doing business impact foreign investment decisions. However, bureaucratic hurdles and inconsistent enforcement can pose risks, requiring businesses to navigate the regulatory landscape carefully.

Supply Chain Diversification Efforts

Vietnam is actively attracting manufacturers relocating from China due to rising costs and geopolitical risks. This shift boosts Vietnam's role in global supply chains, particularly in electronics and textiles, but also strains local infrastructure and labor markets.