Persistent Foreign Exchange Pressures Remain

Egypt continues to face significant foreign exchange challenges, with external debt rising to $161.2 billion and a debt-to-GDP ratio of 44.2%. These pressures impact import costs, repatriation of profits, and overall business confidence, affecting international investment strategies.

Energy tariff overhaul and costs

IMF-linked power tariff restructuring is shifting from volumetric to higher fixed charges, while cutting industrial per-unit rates. Changes can lift inflation yet reduce cross-subsidies. Businesses face uncertainty in electricity bills, competitiveness, and contract pricing for factories.

Nuclear talks, snapback uncertainty

Iran–US nuclear diplomacy restarted via Oman/Türkiye but remains fragile, with disputes over uranium enrichment, missiles and scope. Missing highly enriched uranium and IAEA scrutiny sustain “snapback”/renewed UN measures risk, complicating long-term investment and trade planning.

Deposit flight and confidence shocks

Regional banks remain exposed to rapid deposit migration toward money funds and large banks during stress. Even isolated failures can trigger precautionary cash moves by corporates, disrupting payroll liquidity, trade settlement cycles, and working-capital availability for importers/exporters.

Supply Chain Resilience Amid Global Disruptions

Global supply chains remain in a state of permanent disruption due to geopolitical tensions, trade realignments, and energy volatility. Finnish businesses are adapting by diversifying sourcing and investing in digital infrastructure, but exposure to external shocks remains a critical risk factor.

Sanctions expansion and secondary exposure

US is intensifying sanctions, particularly on Iran’s oil and petrochemical networks, targeting 15 entities and 14 vessels. Heightened enforcement and secondary-sanctions risk raise due-diligence burdens for shipping, insurers, banks, traders, and commodity buyers with complex counterparties.

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.

Geopolitical Tensions and Russia Sanctions

Finland is at the forefront of EU efforts to enforce and expand sanctions against Russia, targeting oil exports and maritime services. These measures, including actions against Russia’s ‘shadow fleet’, impact energy supply chains, raise compliance costs, and heighten regional security risks for international businesses.

Energy sourcing and sanctions exposure

Trade diplomacy increasingly intersects with energy decisions, with US tariff relief linked to expectations on reducing Russian oil purchases and boosting US energy imports. Companies should plan for price volatility, sanctions and reputational risk, and potential knock-on effects on shipping insurance and payments.

Regional HQ and market access leverage

Riyadh continues using policy to anchor multinationals locally, linking government contracting and strategic opportunities to in‑kingdom presence. Reports indicate over 200 companies have relocated HQs to Riyadh. This affects corporate structuring, tax residency, talent deployment, and bid competitiveness.

Infrastructure Investment Spurs Opportunities

Major federal investments under the Infrastructure Investment and Jobs Act are modernizing US transportation, energy, and digital networks. These initiatives create significant opportunities for construction, technology, and green energy sectors, while also improving long-term supply chain efficiency.

US-Taiwan Strategic Trade Integration

A new US-Taiwan trade agreement lowers tariffs to 15% and commits over $250 billion in bilateral investments, especially in semiconductors and AI. This deepens economic ties, boosts exports, and enhances Taiwan’s role in trusted supply chains.

Rail-border bottlenecks and gauge mismatch

Efforts to integrate Ukraine’s rail with EU networks highlight structural constraints: different track gauges require transshipment at borders, creating durable chokepoints. Any surge in exports or reconstruction imports can overwhelm terminals, extending lead times and pushing firms to diversify routing via Danube and road.

Non-tariff barriers and standards convergence

Alongside tariff cuts, Taiwan pledged to address longstanding non-tariff barriers, including easier acceptance of US-built vehicles to US safety standards and broader market access. Firms should anticipate faster regulatory alignment, expanded import competition, and compliance-driven product redesign in some sectors.

Investment security screening expands

CFIUS scrutiny and emerging outbound-investment controls increase deal uncertainty in sensitive sectors like semiconductors, AI and advanced manufacturing. Cross-border M&A may require longer timelines, mitigation agreements, or abandonment; investors need earlier national-security due diligence and structural protections.

Electricity grid reform uncertainty

Eskom’s revised unbundling keeps transmission assets inside Eskom, limiting the new TSO’s ability to raise capital for urgent grid expansion. Business warns this policy “U-turn” could prolong grid constraints, delay renewables connections, and revive supply insecurity for operations.

Export target amid protectionism

Vietnam is targeting US$546–550bn exports in 2026 (+15–16% vs 2025’s record US$475bn), but faces rising protectionism, stricter standards, and dependence on foreign-invested manufacturing and imported inputs—raising compliance, sourcing, and margin risks for exporters.

Auto sector restructuring under tariffs

U.S. auto tariffs and plant adjustments (including shift cuts and layoffs) are reshaping North American production footprints. Canada is introducing tariff-credit relief and incentives to retain assembly and parts capacity. Suppliers face demand volatility, localization pressures and renegotiated contracts.

US tariff shock and reorientation

Reports indicate a steep US reciprocal tariff (cited at 36%) has raised urgency for export diversification, local value-add, and BOI support measures. Firms face margin pressure, potential order diversion, and renewed interest in rules-of-origin planning and US-facing compliance.

Secondary sanctions via tariffs

Washington is escalating Iran pressure using tariff-based secondary measures—authorizing ~25% duties on imports from countries trading with Iran. This blurs trade and sanctions compliance, raises retaliation/WTO dispute risk, and forces multinationals to audit supply chains for Iran exposure.

Verteidigungsboom und Beschaffung

Deutschlands Aufrüstung beschleunigt Investitionen: über 108 Mrd. € stehen für Modernisierung bereit; zusätzlich 536 Mio. € für loitering munitions, Rahmen bis 4,3 Mrd. €. Chancen entstehen für Zulieferer, Dual-Use-Technologien und IT, aber Exportkontrollen, Compliance und Kapazitätsengpässe nehmen zu.

Domestic semiconductor substitution drive

Accelerating localization in semiconductor equipment and materials, alongside constraints on advanced foreign tools, is reshaping vendor ecosystems. Multinationals face procurement displacement, IP exposure, and evolving partnership terms, while China-based fabs prioritize domestic suppliers and capacity.

Critical minerals investment opportunities, risks

Ukraine is advancing licensing and production-sharing models for strategic minerals, including lithium projects with large capex (reported up to US$700m initial; longer-term >US$1.8bn). Potential upside is high for EU battery supply chains, but war-risk insurance, permitting integrity, and infrastructure security remain decisive.

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.

مسار صندوق النقد والإصلاحات

مراجعات برنامج صندوق النقد تركز على الانضباط المالي، توسيع القاعدة الضريبية، وإدارة مخاطر المالية العامة. التقدم أو التعثر ينعكس مباشرة على ثقة المستثمرين، تدفقات العملة الأجنبية، وتوافر التمويل، مع حساسية اجتماعية قد تؤخر قرارات تحرير الأسعار والدعم.

Energy investment and nuclear cooperation linkage

US pushes Korea’s first $350bn investment projects toward energy, while trade tensions spill into talks on civil uranium enrichment, spent-fuel reprocessing, and nuclear-powered submarines. Outcomes affect Korea’s energy-security roadmap, industrial projects, and cross-border financing and permitting timelines.

Export rebound and macro sensitivity

January exports hit a record $65.85bn (+33.9% y/y) and a $8.74bn surplus, led by semiconductors. Strong trade data supports industrial activity, but also increases sensitivity to cyclical tech demand, US trade actions, and won volatility—key for treasury, sourcing, and inventory planning.

Tighter tax audits and customs scrutiny

SAT is intensifying enforcement against fake invoicing and trade misvaluation, using CFDI data to trigger faster audits and focusing on import/export inconsistencies and improper refunds. Compliance burdens rise for multinationals, making vendor due diligence, transfer pricing and customs documentation more critical.

Digital tax reporting expands to SMEs

HMRC’s Making Tax Digital for Income Tax begins April 2026 for self‑employed/landlords over £50k, moving to quarterly submissions via paid software; thresholds fall to £30k (2027) and £20k (2028). This increases compliance cost, process change and advisory demand.

Financial conditions and liquidity volatility

Interbank rates spiked before easing (overnight near 8.5% after 17–17.5%), highlighting liquidity sensitivity and potential pass-through to loan/deposit costs. Off-balance-sheet guarantees are also growing. Foreign investors should stress-test funding, hedging, and counterparty risk for Vietnam operations.

Border trade decentralization measures

Tehran is delegating exceptional powers to border provinces to secure essential imports via simplified customs and barter-style mechanisms. This may improve resilience for basic goods but increases regulatory fragmentation, corruption exposure, and unpredictability for cross-border traders and distributors.

Logistics and multimodal corridor buildout

Budget-linked infrastructure plans emphasize freight corridors, inland waterways and port connectivity to cut transit times and logistics costs. For global manufacturers, improved hinterland access can expand viable plant locations, though land acquisition, project execution and state capacity remain key risks.

Water treaty and climate constraints

Mexico committed to deliver at least 350,000 acre-feet annually to the U.S. under the 1944 treaty after tariff threats, highlighting climate-driven water stress. Manufacturers and agribusiness in northern basins face rising operational risk, potential rationing and stakeholder conflict over allocations.

Defense posture and maritime asset protection

Israel is prioritizing protection of Eilat approaches and offshore gas infrastructure, reflected in expanded naval readiness. Persistent maritime threats raise operational continuity and security requirements for ports, energy off-take, subsea cables and critical infrastructure suppliers operating nearby.

Port congestion and export delays

Transnet port underperformance—especially Cape Town—continues disrupting time-sensitive exports; fruit backlogs reportedly reached about R1bn, driven by wind stoppages, ageing cranes and staffing issues. Diversions to other ports add cost, extend lead times and raise spoilage risk.

Rupee volatility and policy trilemma

The RBI balances growth-supportive rates with capital flows and currency stability amid heavy government borrowing (gross ~₹17.2 lakh crore planned for FY27). A gradually weaker rupee may aid exporters but raises import costs and FX-hedging needs for firms with dollar inputs or debt.