Digital Transformation and Data Center Expansion

Thailand is investing nearly 100 billion baht in new data centers to support digital transformation and emerging industries. This positions the country as a regional technology hub, but also raises energy demand and infrastructure challenges.

Geopolitical Tensions and Sanction Risks

US sanctions and new tariffs targeting countries trading with Iran, including Turkey, introduce significant uncertainty for regional trade. These measures could disrupt supply chains, increase compliance risks, and necessitate strategic adjustments for businesses engaged in cross-border operations.

Danish Defense Policy Hardens

Denmark reaffirmed its Cold War-era policy to defend Greenland militarily against any invasion, including from NATO allies. This stance increases regional tensions and could trigger direct conflict, affecting risk assessments for foreign investment and multinational operations in Denmark.

Escalating U.S. Secondary Tariffs

The United States has imposed a sweeping 25% tariff on any country trading with Iran, sharply escalating secondary sanctions. This move threatens to disrupt global supply chains, deter foreign investment, and force international businesses to reassess exposure to both Iran and U.S. markets.

Supply Chain Resilience and Critical Technologies

Recent Indo-German agreements emphasize collaboration on semiconductors, critical minerals, and digital technologies. These initiatives aim to secure supply chains, foster joint R&D, and support Industry 4.0, reflecting Germany’s strategic response to global disruptions and technological competition.

Low Growth Outlook Amid Fiscal Constraints

The IMF forecasts modest GDP growth of 1.4% in 2026, constrained by domestic structural issues and global risks. Fiscal vulnerabilities limit policy response capacity, making South Africa’s recovery fragile and heightening the need for increased investment and productivity improvements.

Geopolitical Tensions Disrupt Trade

Escalating US–China and US–Venezuela tensions heighten global trade uncertainty, impacting Thai exports, energy prices, and supply chains. Businesses face increased logistics costs and market volatility, especially in energy-intensive and export-oriented sectors, requiring robust risk management and market diversification strategies.

Supply Chain Resilience and Market Access Volatility

Recent tariff disputes and retaliatory measures have highlighted vulnerabilities in Canada’s supply chains, especially in agri-food and automotive sectors. Businesses must adapt to ongoing volatility in market access, regulatory environments, and bilateral relations with both the U.S. and China.

Energy Transition and Industrial Competitiveness

Germany’s energy transition, including the nuclear phase-out and delayed grid upgrades, has increased costs and weakened industrial competitiveness. High energy prices and labor shortages in electrification and renewables challenge Germany’s position in global manufacturing and exports.

Rising Franco-German Defense and Policy Tensions

France is increasingly uneasy about Germany’s €500 billion defense buildup and growing influence in European security and industrial policy. Disputes over joint defense projects and diverging strategic priorities could affect cross-border investments and the future of European industrial cooperation.

War-Driven Energy Infrastructure Crisis

Relentless Russian strikes have damaged Ukraine’s energy grid, causing blackouts for millions and threatening business continuity. Over 600 attacks in the past year have forced emergency imports and repairs, with export and industrial production severely impacted, undermining investor confidence and supply chain reliability.

Western Sanctions Erode Oil Revenues

Western sanctions and price caps have driven Russia's oil and gas revenues to a five-year low, with a 24% annual decline in 2025. This has severely impacted Russia’s fiscal stability, increasing budget deficits and forcing tax hikes, with direct implications for global energy markets and business operations.

China-Pakistan Economic Cooperation Expansion

The second phase of CPEC is broadening from infrastructure to agriculture, technology, and minerals. New agreements focus on joint ventures, technology transfer, and value chain development, positioning China as Pakistan’s key strategic and economic partner, but also raising dependency and sovereignty concerns.

Geopolitical Realignment and Supply Chain Security

Saudi Arabia is deepening ties with China, the US, and regional partners, while pursuing new defense and economic alliances. These shifts impact energy flows, supply chain resilience, and market access, requiring international businesses to closely monitor evolving geopolitical risks.

Agriculture and Resource Export Volatility

Canadian agriculture, especially canola, seafood, and pork, remains highly exposed to tariff disputes. The reopening of the Chinese market is a relief for producers, but ongoing trade tensions highlight the need for diversified export destinations and robust risk management in agri-food supply chains.

Strategic Role in Global Supply Chains

Indonesia’s position as a top beneficiary of global supply chain shifts—especially as U.S.-China trade tensions persist—has led to a 34% increase in U.S. imports from Indonesia in 2025. This strengthens Indonesia’s role as a preferred sourcing hub, but also exposes it to external demand and regulatory volatility.

Defense Sector Privatization and Global Demand

Plans to privatize state-owned defense companies, including a potential $27 billion IPO for Israel Aerospace Industries, reflect efforts to increase flexibility and international competitiveness. Global demand for Israeli defense technology is rising, especially in Europe, amid heightened security concerns.

Logistics, Inventory, and Supply Chain Reconfiguration

US logistics networks are adapting to tariff-driven cost pressures, with firms reducing inventories, diversifying ports of entry, and reconfiguring warehousing. These changes are tightening trucking capacity and increasing supply chain velocity, impacting operational costs and strategic sourcing decisions.

China-Japan Economic Tensions Escalate

China has imposed new export restrictions on rare earths and dual-use goods to Japan, weaponizing resource dependency amid Taiwan-related tensions. Japanese industries face supply chain disruptions, prompting urgent diversification of critical mineral sources and G7 cooperation.

Record Foreign Direct Investment Inflows

Turkey attracted $12.4 billion in FDI in the first 11 months of 2025, a 28% year-on-year increase. The EU accounts for 75% of FDI, with key sectors including wholesale, retail, ICT, and food manufacturing, signaling robust investor confidence and sectoral opportunities.

Resilience Amid US Tariff Pressures

Despite punitive US tariffs in 2024-2025, Brazil achieved record exports of US$348.7 billion in 2025. Diversification toward China, India, and other markets offset losses, but ongoing negotiations with the US and the risk of renewed trade tensions remain critical for exporters and multinationals.

State Control, Corruption, and Business Barriers

Iran’s economy remains dominated by state-linked entities and the IRGC, with high corruption and limited private sector space. Foreign firms face opaque regulations, restricted market access, and elevated compliance and reputational risks.

Geopolitical Tensions Undermine Stability

The Greenland dispute has strained transatlantic alliances, with Finland caught between US demands and EU solidarity. Heightened geopolitical risk undermines the predictability of the business environment and complicates long-term investment strategies.

Energy Security and Transition Challenges

Vietnam’s drive for double-digit growth faces critical energy constraints. While LNG, offshore wind, and nuclear projects are prioritized, slow project execution, regulatory complexity, and grid integration issues risk power shortages, directly affecting industrial output and supply chain reliability.

Activation of EU Anti-Coercion Instrument

France is leading calls to activate the EU’s anti-coercion instrument in response to US economic pressure. This unprecedented move could trigger retaliatory trade measures, restrict US firms’ access to EU markets, and reshape the legal and operational environment for international businesses.

Gaza Conflict Reshapes Regional Stability

The ongoing Gaza conflict and evolving ceasefire arrangements have heightened regional instability, disrupted trade routes, and increased security risks. International businesses face heightened uncertainty, with supply chains, cross-border operations, and investment strategies all affected by the volatile security environment and shifting political alliances.

Geopolitical Influence on US Trade Agreements

US trade negotiations with partners like India and Taiwan are increasingly shaped by strategic considerations, such as technology alliances and supply chain security. This trend links trade policy to broader geopolitical objectives, complicating deal-making and impacting global investment strategies.

Labor Market and Demographic Dynamics

Vietnam’s young, growing workforce underpins its manufacturing competitiveness. However, wage pressures, skills shortages, and the need for digital upskilling are emerging challenges. Labor market reforms and social stability are essential for maintaining cost advantages and attracting long-term investment.

Sectoral Reforms in Gems, Jewellery, and Services

India’s gem and jewellery sector, valued at $28.7 billion, seeks duty cuts, SEZ reforms, and policy changes to maintain competitiveness amid global demand shifts. Services and technology sectors are also expanding, with India’s GCCs expected to reach $100 billion in annual revenue by 2030.

Infrastructure Expansion Faces Local Resistance

Major infrastructure and tech projects, such as Nvidia’s Kiryat Tivon campus, are transforming Israel’s economic landscape. However, local opposition, concerns over land use, and social tensions may delay projects, increase costs, and complicate stakeholder engagement for international investors and operators.

Sanctions, Export Controls, and Security Concerns

The UK’s alignment with Western sanctions on Russia and scrutiny of Chinese investments heighten compliance risks. Export controls, especially in technology and dual-use goods, require robust due diligence and may affect cross-border operations and partnerships.

Labor Market and Skills Shortages

Labor market reforms remain slow, with senior employment and skills gaps becoming critical issues. Companies face challenges in recruitment and internal mobility, impacting productivity and increasing operational risks for international firms in France.

China-Brazil Strategic Alignment

China is deepening its strategic partnership with Brazil, especially in agriculture and infrastructure, amid shifting global power dynamics. Increased Chinese imports of Brazilian soybeans and infrastructure investments strengthen bilateral economic ties and supply chain resilience.

Weak Domestic Demand and Structural Imbalances

China’s economic growth remains export-driven, with domestic consumption and investment lagging. Despite 5% GDP growth in 2025, retail sales and fixed-asset investment declined, reflecting persistent property sector weakness and deflationary pressures, which may limit long-term growth and market opportunities.

Energy Transition Drives Policy Shifts

Germany’s energy transition, including the nuclear phase-out and coal exit by 2038, has led to high energy costs and reliance on state intervention. EU approval for subsidized gas plants and industrial power price relief aims to support energy-intensive industries, but the transition remains costly and controversial, impacting competitiveness.

Energy Sector Expansion and Regional Integration

Israel’s approval of $2.4 billion in new investment for the Leviathan gas field and a $30 billion export deal with Egypt position it as a regional energy hub. These developments enhance energy security and competitiveness, but require ongoing infrastructure modernization and geopolitical risk management.