Mining Sector Pressures and Logistics

Mining output declined 2.7% in late 2025 due to falling coal and iron ore production, rising costs, and logistical constraints. Global trade tensions, especially with the US and China, further threaten export volumes and investor confidence in this critical sector.

Logistics Modernization and 3PL Expansion

Mexico’s third-party logistics (3PL) market is forecast to nearly double to $26.8 billion by 2033, driven by nearshoring, e-commerce, and infrastructure investment. Enhanced customs coordination, digitalization, and cross-border logistics partnerships are improving supply chain efficiency and supporting regional integration.

Geopolitical Risks and Regulatory Tensions

US-South Korea trade frictions are compounded by regulatory disputes, such as perceived discrimination against US tech firms operating in Korea. These tensions risk retaliatory measures, complicate compliance for multinationals, and may spill over into other sectors, including digital services.

Real Estate Transformation and Urbanization

India’s real estate market is projected to reach $1.26 trillion by 2034, driven by urbanization, infrastructure, and PropTech. Regulatory reforms like RERA and rising NRI investments are boosting transparency and investor confidence, with commercial and residential demand expanding in Tier-II cities.

Canada’s Strategic Autonomy and Defense Spending

Canada is doubling defense spending by 2030 and building domestic resilience in critical sectors. This policy aims to strengthen sovereignty and reduce vulnerability to external coercion, impacting procurement, industrial partnerships, and the defense supply chain landscape.

US-China Economic Competition Intensifies

US-China relations remain a dominant force in global economics, with ongoing tensions over technology, trade, and security. These dynamics influence market access, regulatory risk, and supply chain resilience for international businesses operating in or sourcing from both countries.

Upgraded EU-Vietnam Strategic Partnership

Vietnam and the EU have elevated ties to a comprehensive strategic partnership, deepening cooperation in trade, critical minerals, semiconductors, and technology. This move supports supply chain security, market access, and investment, especially as US tariffs reshape global trade dynamics.

Labor Market and Immigration Enforcement

Intensified immigration raids, border controls, and restrictive labor policies have disrupted workforce availability, dampened consumer demand in immigrant communities, and created compliance challenges for businesses, particularly in sectors reliant on foreign labor and diverse talent pools.

Domestic unrest and security crackdown

Large-scale protests and lethal repression are elevating operational and reputational risk for foreign-linked firms. Risks include curfews, disrupted labor availability, arbitrary enforcement, asset seizures, and heightened human-rights due diligence expectations from investors, banks, and regulators.

Logistics and Infrastructure Modernization

Mexico’s third-party logistics market is forecast to grow from $14.4 billion in 2024 to $26.8 billion by 2033, driven by nearshoring, e-commerce, and technology adoption. Investments in freight corridors, bonded warehouses, and customs efficiency are strengthening supply chain competitiveness.

Debt Management and Fiscal Sustainability Challenges

Egypt’s reliance on local and international debt issuance remains high, with EGP 843 billion in local debt planned for February 2025 and $2 billion in international bonds for FY 2025/26. Fiscal sustainability concerns persist, influencing sovereign risk and borrowing costs.

Circular Economy Initiatives Gain Momentum

France is advancing circular economy models for EV batteries, with startups and industrial players piloting second-life and recycling projects. These initiatives are increasingly supported by public policy, enhancing resource efficiency and opening new business models for investors.

Election-driven fiscal and policy volatility

The Feb 8 election and “populism war” amplify risks of debt-funded stimulus, policy reversals, and slower permitting. Bond-curve steepening on fiscal worries signals higher funding costs and potential ratings pressure, affecting PPPs, SOEs, and investor confidence.

Strategic Partnerships and Economic Diplomacy

Egypt is deepening economic ties with Gulf states, notably Qatar, through multi-billion-dollar investment agreements and energy cooperation. These partnerships diversify Egypt’s capital sources and support resilience amid regional and global economic pressures.

Regulatory Changes and Labor Compliance

Recent labor reforms include a 13% minimum wage hike, stricter workplace inspections, and new rules for app-based workers. Businesses must adapt to evolving compliance requirements, increased enforcement, and potential cost pressures in sectors like automotive and technology.

US-France Trade War Escalation

Tensions between France and the US have escalated, with threats of 200% tariffs on French wine and champagne over political disputes, notably Greenland and Gaza. Such measures threaten billions in exports, disrupt transatlantic supply chains, and increase uncertainty for investors and multinationals.

Rial collapse, high inflation

The rial’s rapid depreciation to around 1.5–1.6 million per USD and inflation near 50% are destabilizing pricing, wages, and import capacity. Multiple exchange rates and subsidy changes amplify settlement risk, impair demand forecasting, and complicate repatriation and local sourcing.

Semiconductor and Technology Sector Push

Vietnam is prioritizing the development of its semiconductor and technology industries, including chip fabrication and critical minerals processing. Collaboration with the EU and other partners aims to move Vietnam up the value chain, supporting high-tech investment and innovation ecosystems.

US Secondary Sanctions and Iran Trade

A new US executive order imposes a 25% tariff on countries trading with Iran, directly impacting Turkey’s exporters and supply chains. This policy creates compliance risks, potential trade diversion, and higher costs for Turkish businesses with US market exposure.

Automotive Sector Policy Shifts

The automotive industry is navigating trade tensions, policy uncertainty, and a flood of cheap imports, particularly from China. The government is considering tariff adjustments and new energy vehicle policies, with the sector’s future hinging on reform momentum and global market access.

Capacity constraints and productivity ceiling

Business surveys show utilisation still elevated (around 83%+), signalling tight capacity and lingering cost pressures. Without productivity gains, growth can translate into inflation and wage pressures, affecting project timelines, construction costs, and the reliability of domestic suppliers for global value chains.

Food import inspections disrupt logistics

A new food-safety regime (Decree 46) abruptly expanded inspection and certification requirements, stranding 700+ consignments (about 300,000 tonnes) and leaving 1,800+ containers stuck at Cat Lai port. Compliance uncertainty can delay inputs and raise inventory buffers.

Labor Market Saudization Intensifies

The government has raised Saudization rates to 60% in key private sector roles, including marketing and sales, and restricted senior positions to nationals. These measures impact expatriate hiring, increase compliance costs, and require strategic workforce adjustments for international businesses.

Border crossings and movement constraints

Rafah’s limited reopening and intensive screening regimes underscore persistent frictions in people movement and (indirectly) trade flows. Firms relying on regional staff mobility, humanitarian/contractor access, or cross-border services should plan for sudden closures, enhanced vetting and longer lead times.

Persistent Logistics and Port Inefficiencies

Chronic inefficiencies at South African ports, especially Cape Town and Durban, continue to undermine export competitiveness. Recent failures cost the fruit sector hundreds of millions of rand, with global port rankings placing South African ports among the worst, hampering supply chains and growth.

De-dollarisation and local-currency settlement

Russian officials report near‑100% national‑currency use in trade with China and India and ~90% within the EAEU, reducing USD/EUR reliance. For foreign firms, FX convertibility, hedging, and repatriation complexity rise, especially where correspondent banking access is constrained.

Public-Private Partnerships Drive Infrastructure

Turkey has implemented 272 PPP projects worth $215 billion since 1986, including airports and bridges. The PPP model remains central to infrastructure, with a focus on sustainability, human-centered development, and attracting international financing.

Resilient Export Growth Amid Global Shifts

Despite global headwinds, Turkey’s exports reached $296.4 billion in 2025, with robust performance in high-tech, defense, and diversified markets. However, cost pressures and shifting EU trade rules create sectoral winners and losers, requiring adaptive strategies.

Energy Sector Reform and Pemex Strategy

Mexico is investing $323 billion in energy and infrastructure through 2030, with Pemex targeting 1.8 million barrels daily and expanding natural gas. Reforms focus on debt reduction, domestic refining, and attracting private capital, but Pemex’s financial health remains a concern.

Afreximbank and Regional Integration

South Africa’s accession to Afreximbank unlocks up to $11 billion in funding for infrastructure, energy, and industrialization. This supports value-added manufacturing, Black business participation, and deeper integration into the African Continental Free Trade Area, enhancing regional trade prospects.

Baht strength and financing conditions

The baht appreciated strongly in 2025 and stayed firm into 2026, pressuring export and tourism competitiveness while lowering import costs. With possible rate cuts but rising long-end yields, corporates face mixed funding conditions, FX hedging needs, and margin volatility.

Collapse of Food and Commodity Trade

Iran’s economic turmoil and new U.S. tariffs have severely disrupted food and commodity imports and exports, notably India’s basmati rice trade. Payment delays, shipment cancellations, and rising costs are undermining established supply chains and market confidence.

Stable Growth and Investment Climate

President Prabowo projects economic growth above 5% with low inflation, driven by industrialization and the new sovereign wealth fund Danantara. The government is rationalizing state-owned enterprises and courting foreign investors, enhancing Indonesia’s appeal as a stable investment destination.

Energy Transition and LNG Import Surge

Egypt is rapidly expanding renewable energy projects, signing $1.8 billion in deals with Norway and China. However, domestic gas production decline and regional supply disruptions have turned Egypt into a major LNG importer, raising costs and supply chain complexity.

Critical Minerals Strategy Accelerates

Canada is rapidly advancing its critical minerals sector, with new provincial and federal strategies, international partnerships (notably with India), and investment in recycling. This positions Canada as a key supplier for global EV, battery, and tech supply chains, reducing reliance on China.

Complex Sanctions and Regulatory Landscape

Ukraine’s regulatory environment is shaped by evolving sanctions on Russia and new trade controls. Businesses face compliance challenges, especially regarding dual-use goods and financial transactions, requiring constant monitoring of legal and operational risks.