Logistics Hub and SEZ Buildout

Saudi Arabia is expanding ports, rail, airports and specialized logistics zones across Riyadh, Jeddah, Dammam and NEOM. Faster customs, new freight corridors and automation strengthen regional distribution prospects, but companies must adapt operations to rapidly evolving infrastructure and compliance standards.

Industrial Input Costs Climbing

The government raised natural gas prices for energy-intensive industries in May, lifting cement gas costs to $14 per mmbtu and iron, steel, fertilizer and petrochemical rates to $7.75. Manufacturers face margin pressure, possible output adjustments and weaker export competitiveness.

PIF-Led Megaproject Execution

The Public Investment Fund remains central to domestic investment, with assets around SR3.41 trillion and focus on tourism, manufacturing, logistics, clean energy, and urban development. Megaproject execution is generating large contract flows, but concentration risk and timeline adjustments remain important considerations.

Fuel Inflation and Rate Risk

South Africa’s import dependence leaves businesses exposed to oil shocks and tighter monetary conditions. Petrol rose 14% to 26.63 rand per litre and diesel above 30 rand, increasing transport and food costs while raising the risk of prolonged high interest rates.

Fuel import vulnerability exposed

Australia’s heavy dependence on imported liquid fuels has become a frontline business risk. China supplied about 30% of jet fuel last year, while Middle East disruption and export curbs threaten aviation, mining logistics, freight continuity and broader commodity exports.

Energy Shock Hits Industry

Germany’s 2026 growth forecast was cut to 0.5% from 1.0% as war-driven oil and gas spikes raised inflation to 2.7% and damaged confidence. Energy-intensive sectors face planning uncertainty, higher operating costs, and renewed pressure on export competitiveness and investment decisions.

CUSMA Review and Tariff Uncertainty

Canada faces elevated trade uncertainty as CUSMA review talks slip past July 1 and U.S. Section 232 tariffs remain on steel, aluminum, autos and lumber. Prolonged negotiations risk delaying investment, disrupting cross-border sourcing, and complicating North American market planning.

Electricity Stability Improves Significantly

Eskom expects no winter load-shedding under normal conditions after more than 340 consecutive days without cuts, lower unplanned outages, and diesel savings of about R27 billion versus three years ago. Improved power reliability supports manufacturing, mining, and investor confidence.

Infrastructure Expansion Supporting Supply

Vietnam is accelerating industrial, logistics, and transport upgrades to support trade and new investment, especially in Bac Ninh and major port corridors. Ready industrial land, digital infrastructure, and proposed direct shipping links can improve reliability, though execution remains critical.

Commerce extérieur et Mercosur

L’entrée provisoire en vigueur de l’accord UE-Mercosur ouvre un marché de plus de 700 millions de consommateurs et réduit des droits sur autos, vins et pharmaceutiques. Mais l’opposition française et agricole accroît l’incertitude politique, réglementaire et sectorielle autour de sa mise en œuvre.

USMCA Tariffs Here to Stay

Washington has signaled automotive, steel and aluminum tariffs will persist through the 2026 USMCA review. Mexico sent over 2.8 million of 4 million vehicles produced in 2024 to the United States, so enduring duties will materially alter pricing, margins and investment planning.

Cyber Rules Raise Compliance

New cyber governance and data localization momentum are reshaping operating requirements for digital businesses. Vietnam ratified the Hanoi Convention, reports thousands of cyberattacks and over 3,000 ransomware-hit enterprises, increasing compliance, security and local infrastructure demands for investors.

Digital and Data Regulation

Brazil’s tightening scrutiny of digital markets, platform governance and personal-data use is raising compliance risk. Ongoing debates around content moderation, competition rules and LGPD enforcement affect fintechs, e-commerce, AI services and multinationals handling Brazilian consumer and employee data.

Large-Scale Infrastructure Financing Drive

South Africa is mobilising substantial capital for logistics modernisation, including a nearly R2 trillion rail master plan and a 5.86 billion rand French loan for Transnet. For investors, this expands project pipelines, supplier opportunities and corridor upgrades, while exposing execution and governance risks.

Industrial Policy Reshapes Supply Chains

The government is strengthening economic-security and industrial-policy tools, including stricter scrutiny of foreign investment, support for critical sectors, and new steel protections. For firms, this means greater policy activism, but also higher input costs and more regulatory intervention.

Shekel Appreciation Squeezes Exporters

The shekel strengthened below 3 per dollar for the first time in 31 years, with the dollar down 18.83% year-on-year. While reflecting lower risk premium and capital inflows, the move compresses margins for exporters and tech firms with dollar revenues and shekel-denominated costs.

Critical Minerals Supply Tightening

Nickel markets are facing tighter feedstock and input conditions. Indonesia’s 2025 ore quota of 260–270 million tons trails estimated smelter demand of 340–350 million, while sulphur disruptions and mine stoppages are raising price volatility and procurement risk.

US Pressure on Manufacturing Relocation

Washington is offering tariff relief to Canadian steel and aluminum firms if they shift production south, intensifying pressure on Canada’s industrial base. The policy raises plant-closure and layoffs risks, while forcing companies to reassess footprint, capital allocation, and supply-chain resilience.

Alternative Corridor Logistics Buildout

Egypt is expanding multimodal corridors linking Europe, the Gulf, and Africa through Damietta, Safaga, Sokhna, and Trieste. These routes offer contingency value as Hormuz and Red Sea disruptions raise shipping risk, giving companies optionality in routing, warehousing, and regional distribution planning.

Oil Export Disruptions Deepen

Ukrainian strikes on Russian ports and refineries cut April oil production by 300,000-400,000 barrels per day and reduced March revenues by at least $2.3 billion. Energy traders, shippers and buyers face heightened supply volatility, insurance uncertainty and disrupted Black Sea and Baltic flows.

IMF Reform Price Pressures

IMF-backed reforms are driving subsidy cuts, fuel increases of 14%–30%, and higher industrial gas tariffs, lifting operating costs across manufacturing, transport, and agriculture. Businesses face tighter margins, weaker consumer demand, and more difficult pricing decisions despite longer-term macro stabilization benefits.

Industrial Output and Feedstock Disruption

Japan’s factory output fell 0.5% in March after a 2.0% decline in February, led by chemicals and fuels. Polyethylene output dropped 27% and polypropylene 15%, highlighting supply-chain fragility for manufacturers reliant on petrochemical inputs and stable energy feedstocks.

Currency Instability and Inflation

Turkey’s lira has fallen to record lows near 45 per dollar while April inflation accelerated to 32.37% year on year and 4.18% month on month, raising import costs, pricing volatility, wage pressure, and hedging needs for foreign investors and supply chains.

Energy Shock Pressures Operations

The Iran conflict has lifted Brent by about 70%, pushed US gasoline above $4 per gallon, and raised transport and input costs across sectors. Higher fuel and power expenses are squeezing margins, disrupting budgeting assumptions, and increasing logistics and distribution costs for businesses.

Energy Security Drives Intervention

Government policy is increasingly shaped by energy self-sufficiency goals rather than pure market logic. The push for B50 despite input shortages and infrastructure constraints signals a more interventionist operating environment affecting fuel importers, agribusiness exporters, and industrial planning assumptions.

Energy Security and Fuel Dependence

Australia’s heavy reliance on imported refined fuels has become a core operational risk, with China supplying about 30% of jet fuel and over 80% of regional oil flows exposed to Strait of Hormuz disruption, threatening aviation, mining logistics, freight and industrial continuity.

Tourism and Services Expansion

Tourism is becoming a major demand engine, with 123 million visitors in 2025 and ambitions to reach 150 million by 2030. Rising pilgrim and leisure flows boost hospitality, transport, retail and aviation, creating opportunities but also capacity and service-delivery pressures.

Municipal governance and water stress

Dysfunctional municipalities remain a binding constraint on business activity, affecting roads, utilities and permitting. Nearly half of wastewater plants are not operating optimally, over 40% of treated water is lost, and new PPP-style financing is being mobilized to address gaps.

China trade ties remain pivotal

Canberra is stabilising relations with Beijing because bilateral trade still underpins major supply chains, investment and livelihoods. Officials say China-linked fuel, fertiliser and industrial inputs sustain Australia’s resources sector, highlighting continued exposure to Chinese policy, demand and coercive leverage.

Samsung Labor Unrest Risk

Samsung unions representing over 70% of domestic staff are threatening an 18-day strike from May 21. Reported output fell 18.4% at memory fabs and 58.1% at foundry lines during a rally, risking customer delays, price volatility and supplier disruption.

Defence industrial policy deepens

AUKUS and related defence programs are driving long-horizon industrial investment, especially in Western Australia. Base upgrades at HMAS Stirling, submarine infrastructure and new Japan-Australia frigate production create opportunities in advanced manufacturing, but execution risk and supply constraints remain material.

Water And Municipal Service Risks

Dysfunctional municipalities and water shortages are increasingly material business risks. Government is advancing a local-government white paper and water-sector reforms through WATERCOM, yet weak service delivery, corruption, and failing local infrastructure continue disrupting industrial sites, labor productivity, and investment decisions.

Payment Frictions and Financial Isolation

New EU measures target 20 more Russian banks, crypto platforms, RUBx and the digital rouble, deepening financial isolation. Cross-border settlements are increasingly routed through alternative channels, raising counterparty, sanctions, transaction-cost and payment-delay risks for companies serving Russia-adjacent trade corridors.

Supply chain and import disruptions

Trade flows remain exposed to disrupted regional shipping, costly rerouting and import shortfalls. Reduced supplies from Turkey, Jordan and Gaza, plus war damage near border farming areas, have tightened availability of food and inputs, raising procurement uncertainty and operating costs.

Selective Opening to Chinese FDI

India is easing FDI restrictions for firms with up to 10% Chinese ownership and fast-tracking approvals in 40 manufacturing sub-sectors within 60 days. The move could unlock capital and technology, but security screening, Indian-control rules and execution risks remain important.

Judicial Reform Erodes Certainty

Business confidence is being undermined by concerns over judicial independence after Mexico’s court reforms. Investors are increasingly adding arbitration protections and contingency clauses, while U.S. officials warn legal uncertainty could delay capital deployment, raise dispute risk and weaken long-term project bankability.