MSCI downgrade and market access

MSCI flagged Indonesia’s equity market “investability” risks, freezing index changes and threatening a downgrade. Authorities raised minimum free float to 15% and discussed disclosure reforms. Persistent volatility can raise funding costs, complicate exits, and deter portfolio and FDI inflows.

Industrial energy costs and grid build

Industry faces persistently high electricity costs and an estimated ~£80bn transmission-grid expansion to 2031. While network-charge discounts broaden, details remain unclear. Energy-intensive manufacturing may see closures or relocation, affecting supplier bases and UK production economics.

Allied defence-industrial deepening (AUKUS)

AUKUS-related procurement and wider defence modernisation continue to reshape industrial partnerships, technology controls and security vetting. Suppliers in shipbuilding, cyber, advanced manufacturing and dual-use tech may see growth, but face stricter export controls, sovereignty requirements and compliance burdens.

Monetary tightening and demand pressures

The RBA lifted the cash rate 25bp to 3.85% as inflation re-accelerated (headline ~3.8% y/y; core ~3.3–3.4%) and labour markets stayed tight (~4.1% unemployment). Higher funding costs and a stronger AUD affect capex timing, valuations, and import/export competitiveness.

Ports upgrades and maritime competitiveness

Karachi launched modern bunkering with Vitol, targeting 500k–600k tons annually and 70–100 operations monthly, improving turnaround. Gwadar airport/free-zone incentives and highways expand options. Benefits depend on security and governance, but could lower logistics friction.

Сжатие азиатского спроса на нефть

Риски сокращения импорта Индией и санкционное давление увеличивают скидки на российскую нефть: дисконты ESPO к Brent около $9/барр., Urals — ~$12, а поставки в Индию падали до ~1,3 млн барр./сут. Россия сильнее зависит от Китая.

Energy transition, nuclear restart optionality

Japan’s decarbonisation path remains hybrid: renewables growth alongside potential nuclear restarts and new flexibility markets. This uncertainty affects long-term power pricing, siting of energy-intensive assets, and PPAs; it also shapes LNG demand forecasts and contract flexibility requirements for utilities and traders.

US–Taiwan tariff pact reshapes trade

A new reciprocal US–Taiwan deal locks a 15% US tariff on Taiwanese imports while Taiwan removes or cuts about 99% of tariff barriers and tackles non-tariff barriers. It shifts pricing, compliance, and market-access assumptions across autos, food, pharma, and electronics.

Monetary policy and dollar volatility

Cooling inflation (CPI 2.4% y/y in January; core 2.5%) is shifting expectations toward midyear Fed cuts. Rate and FX swings affect working capital, hedging, and investment hurdle rates, while tariff-driven relative price changes alter import demand and margins.

Tariff rationalisation amid protectionism

Recent tariff schedules cut duties on many inputs, improving manufacturing cost structures, while maintaining high protection on finished goods in select sectors. This mix changes sourcing decisions, compliance requirements, and effective protection rates, influencing export orientation versus domestic-market rent-seeking.

UK-Russia sanctions escalation compliance

The UK is tightening Russia measures, including designations and a planned ban on maritime services (transport, insurance) supporting Russian LNG to third countries, alongside a lower oil price cap. This elevates due-diligence needs for shipping, energy, and finance.

Energy security and transition investment

Rapid growth targets are forcing revisions to energy planning and grid investments. New frameworks—such as a two-part tariff for battery energy storage (effective Jan 2026)—aim to attract private capital, reduce curtailment, and improve reliability, affecting industrial uptime and PPA economics.

Mega logistics buildout: Land Bridge

The THB990bn ‘Land Bridge’/Southern Economic Corridor plan could tender within four years under a PPP Net Cost model, linking Andaman and Gulf ports plus rail/motorway. If executed, it reshapes regional routing, distribution footprints and industrial-site valuations across Thailand.

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.

Expanding sanctions and enforcement

EU’s proposed 20th package broadens restrictions on energy, banks, goods and services, adds 43 shadow-fleet vessels (≈640 total), and targets third‑country facilitators. Heightened secondary‑sanctions exposure raises compliance costs and transaction refusal risk for global firms.

FX liquidity and import compression

Foreign-exchange availability and rupee volatility continue to shape import licensing, payment timelines, and working-capital needs. Even with gradual reserve improvements, firms face episodic restrictions and higher hedging costs, affecting machinery, chemicals, and intermediate inputs critical to export supply chains.

Supply-chain bloc formation pressures

US-led efforts to build critical-minerals “preferential zones” with reference prices and tariffs signal broader de-risking blocs. Companies may face bifurcated supply chains, dual standards, and requalification of suppliers as trade rules diverge between China-centric and allied networks.

Suez/Red Sea shipping normalization

Carrier returns to Suez (Maersk–Hapag-Lloyd Gemini) signal gradual reopening after Houthi-linked disruptions. Suez traffic and revenue rebounded (revenue +24.5%, traffic +9%). However, renewed regional escalation could force Cape diversions, raising lead times and costs.

High rates, easing cycle

The Central Bank kept Selic at 15% and signaled potential cuts from March as inflation expectations ease, but fiscal uncertainty keeps real rates among the world’s highest. Credit costs, consumer demand, and project IRRs remain sensitive to policy communication and politics.

Regulatory unpredictability and enforcement

Sector-focused campaigns and uneven local enforcement create compliance uncertainty in areas such as antitrust, national security reviews, and ESG/labor enforcement. International firms should expect faster investigations, reputational exposure, and the need for stronger internal controls and local engagement.

Economic security investment state backstop

Tokyo plans a “designated overseas business projects” regime where government absorbs losses on strategic overseas investments (ports, undersea cables, data centers), supported by JBIC financing. This can crowd-in private capital, shift bid competitiveness, and steer FDI toward ASEAN corridors.

Rates at peak, easing uncertain

With Selic around 15% and the central bank signalling data-dependence ahead of possible March cuts, corporate funding, FX and demand conditions remain volatile. A smoother disinflation path could unlock refinancing and capex, but wage-led services inflation is a key risk.

Labour shortages, managed immigration

Severe labour scarcity is pushing wider use of foreign-worker schemes, but with tighter caps and complex visa categories. Proposed limits (e.g., 1.23 million through FY2028) could constrain logistics, construction and services, lifting wages and automation investment while complicating staffing for multinationals.

Macroeconomic strain and FX pressure

Logistics disruptions and energy damage are weighing on growth and export receipts. The central bank cut the policy rate to 15% as inflation eased, but expects renewed price pressure and slower disinflation; port attacks may reduce Q1 export earnings by roughly $1 billion, stressing FX markets.

USMCA review and tariff risk

The July 2026 USMCA joint review is opening talks on stricter rules of origin, critical-minerals coordination, labor enforcement and anti-dumping. Fitch warns “zombie-mode” annual renewals. Uncertainty raises compliance costs and chills long-horizon manufacturing investment.

Palm oil governance and enforcement risk

Authorities arrested officials and executives over alleged manipulation of crude palm oil export classifications to evade domestic market obligations and levies, with estimated state losses up to Rp14.3 trillion. Tighter enforcement could disrupt permitting, raise compliance costs, and increase legal exposure in agribusiness.

Sanctions compliance incentives harden

OFSI now states penalties can be reduced up to 30% for self-reporting and cooperation. For online investing firms with cross-border clients, stronger screening, escalation and audit trails become strategic necessities as UK sanctions enforcement intensity rises.

Deforestation-linked trade compliance pressure

EU deforestation rules and tighter buyer due diligence raise traceability demands for soy, beef, coffee and wood supply chains. A Brazilian audit flagged irregularities in soybean biodiesel certification, heightening reputational and market-access risks for exporters and downstream multinationals.

Trade rerouting to China

Russia’s export dependence is concentrating on China as India’s intake becomes uncertain and discounts widen (ESPO ~US$9/bbl, Urals ~US$12/bbl vs Brent). This increases buyer power, pricing volatility and settlement complexity, while complicating long-term offtake and investment planning.

Fiscal pressure and project sequencing

Lower oil prices and reduced Aramco distributions are tightening fiscal space, raising the likelihood of project delays, re-scoping and more PPP-style financing. International contractors and suppliers should plan for slower award cycles, tougher payment terms, and higher counterparty diligence.

Critical minerals alliance reshaping

Canberra’s A$1.2bn Critical Minerals Strategic Reserve (initially gallium, antimony, rare earths) and deeper US-led cooperation (price floors, offtakes) are accelerating non‑China supply chains, creating investment openings but higher compliance, geopolitical and pricing-policy risk for manufacturers.

Tech investment sentiment and resilience

Israel’s innovation ecosystem remains a core investment draw, but conflict-linked volatility and talent constraints influence funding conditions and valuations. Companies should stress-test R&D continuity, cyber risk, and cross-border collaboration, while watching for policy incentives supporting strategic sectors.

Fiscalización digital y aduanas

El SAT intensifica auditorías basadas en CFDI y cruces automatizados, priorizando “factureras”, subvaluación y comercio exterior. Se reporta enfoque en aduanas (27,1% de ingresos tributarios) y nuevas facultades/visitas rápidas, elevando riesgos de bloqueo operativo, devoluciones y multas.

Tighter tech export controls

BIS continues tightening—and sometimes recalibrating—controls on advanced computing, AI chips, and semiconductor equipment tied to China. Firms must manage licensing, end-use checks, and diversion risk through third countries, raising costs and delaying shipments in sensitive tech ecosystems.

Defense spending surge and procurement

Defense outlays rise sharply (2026 budget signals +€6.5bn; ~57.2bn total), with broader rearmament discussions. This expands opportunities in aerospace, cyber, and dual-use tech, while tightening export controls, security clearances, and supply-chain requirements.

EU partnership deepens market access

Vietnam–EU ties were upgraded to a comprehensive strategic partnership, reinforcing the EVFTA-driven trade surge (two-way trade about US$73.8bn in 2025) and opening new cooperation on infrastructure, cybersecurity, and supply-chain security—supporting diversification away from US/China shocks.