Fiscal Strain, High Rates

Fiscal slippage and heavy subsidized lending are keeping Brazil’s policy rate near 14.5%, with inflation above target and debt around 80% of GDP. Elevated funding costs, FX volatility, and weaker monetary transmission raise financing, hedging, and investment risks.

Overseas investment security tightening

New rules effective July 1 expand state control over overseas investment, technology transfers, services, data, and employee deployment linked to national interests. Multinationals face greater uncertainty around approvals, knowledge transfer, localization, and retaliation risks if home governments restrict Chinese capital.

IMF-Linked Fiscal Tightening

Pakistan’s delayed FY2027 budget reflects difficult IMF negotiations over revenue, subsidies and spending. Non-compliance could delay program reviews, threaten over $9 billion in rollovers, and tighten liquidity, raising sovereign, tax and demand risks for investors and import-dependent businesses.

High fuel and inflation pressure

Oil-market shocks have pushed petrol to record levels around R28.06 per litre, raising transport, food, and operating costs across the economy. Elevated energy inflation also tightens monetary conditions, pressuring consumer demand, financing costs, and margins for importers, distributors, and labour-intensive sectors.

Gas Investment Revival Momentum

Cairo is trying to restore investor confidence in hydrocarbons and regional gas trading. Officials cite 102 oil and gas discoveries since July 2024, plans for $17 billion of new investment, and full repayment of $6.1 billion arrears to foreign partners.

Critical Minerals Supply Push

Australia is accelerating critical-minerals investment and downstream refining to reduce concentrated global supply dependence. New financing and strategic alignment with the United States strengthen opportunities in rare earths and battery materials, while tightening scrutiny over ownership, processing, and offtake.

Managed US-China Trade Friction

Beijing and Washington are institutionalising a managed-trade approach rather than resolving structural disputes. A new bilateral trade board may ease tariffs on roughly $30 billion of non-strategic goods, but higher baseline US tariffs, export controls and policy unpredictability will keep sourcing, pricing and market-access risks elevated.

Trade Corridor and Port Expansion

To support non-U.S. export growth, Canada is prioritizing ports, rail links and transmission corridors, especially around Vancouver. The Port of Vancouver already handles about $1 billion in trade daily with 170 countries, so expansion decisions will directly affect logistics reliability, shipping capacity and export competitiveness.

Auto Rules of Origin Shift

Proposed North American auto-content rules would raise regional sourcing requirements to 82%, with 50% reportedly tied to U.S. content. That would reshape supplier qualification, pressure Canadian assemblers and parts makers, and complicate investment decisions across integrated manufacturing networks.

Harder Screening for Foreign Capital

CFIUS scrutiny is intensifying for foreign investors in US critical technologies, including AI, semiconductors, biotech, and cybersecurity. Even small stakes can trigger review, delays, or mitigation, affecting cross-border venture flows, deal structuring, and timelines for international investors entering US assets.

Iraq-Ceyhan Route Recovery

The Turkey-Iraq crude pipeline resumed operations in March, with a 1.5 million barrel-per-day capacity and initial export plans of 170,000 then 250,000 bpd. Restored flows strengthen Ceyhan’s commercial role, benefiting traders, refiners, port operators and adjacent industrial clusters.

Coal Dependence Slows Transition

Indonesia remains heavily reliant on coal, which still accounts for roughly 61% of electricity generation and underpins export revenue and political influence. This supports near-term energy availability, but complicates decarbonization planning, carbon-sensitive investment decisions, and long-term power-sector competitiveness.

US Tariff and Trade Friction

Washington has proposed additional 12.5% tariffs on Japanese goods under a forced-labor trade probe, although Tokyo says bilateral terms should hold. The episode highlights persistent US policy unpredictability, affecting export planning, pricing, and localization decisions for Japan-based manufacturers.

Interprovincial Trade Barrier Reforms

Ottawa is pushing a “One Canadian Economy” agenda to reduce internal barriers that fragment the domestic market and weaken resilience against U.S. shocks. Slow progress on interprovincial alcohol trade illustrates implementation risks, but successful reform could improve scale, distribution efficiency and national supply-chain flexibility.

AI data centers reshape industry

SoftBank’s €45 billion commitment by 2031 and other hyperscaler projects are positioning France as a major European AI-computing hub. This expands digital infrastructure and supplier demand, while increasing competition for power, land, and high-value technology capture.

EU Animal Export Restrictions

The EU will bar Brazilian animal-product exports from 3 September unless Brasília proves compliance with antimicrobial controls. Beef, poultry, fish and honey are affected, with potential losses estimated between US$2 billion and US$5 billion annually across export chains and processing sectors.

High Rates Constrain Capital

Brazil’s Selic rate remains at 14.5%, among the world’s highest real rates, while inflation expectations for 2026 rose to 5.04%. Elevated borrowing costs and weaker monetary transmission raise financing costs, slow private investment and increase hedging and working-capital pressures for business operations.

Gas Reservation Policy Risks

Canberra’s proposed gas reservation scheme could require LNG exporters to divert up to 20% of annual volumes domestically from 2027. The measure aims to curb local prices but risks contract uncertainty, investor caution, and strains with key Asian buyers including Japan, Korea, and Malaysia.

Nuclear Uncertainty And Verification

IAEA monitoring gaps have deepened after conflict damage, with inspectors unable to verify parts of Iran’s enriched uranium stockpile, including 440.9 kilograms enriched to 60%. This keeps nuclear negotiations volatile and sustains the risk of renewed sanctions, military action, and investor hesitation.

Refinery strikes disrupt fuel supply

Ukrainian drone attacks on refineries, depots and pipelines are now affecting Russian domestic fuel balances. Moscow acknowledged shortages in Crimea and southern regions, gasoline prices are up 4.8% this year, and crude exports may be cut to prioritize local refining.

State-Led Defense Industrial Upside

Even as public finances tighten, defense and aerospace are among the sectors still benefiting from stronger strategic spending and export support. This creates selective upside for manufacturers, suppliers, and dual-use technology firms aligned with Europe’s rearmament and resilience priorities.

Green Power Infrastructure Buildout

Egypt is accelerating renewable energy, storage and green industry projects to reduce fuel stress and improve energy security. New battery projects total 1,500 MWh, with a 3,000 MWh factory planned, supporting grid resilience, industrial localization and lower long-term operating costs.

Nickel Nationalism Raises Uncertainty

Indonesia’s tighter nickel quotas, attempted royalty increases, and stricter foreign-exchange rules have unsettled major investors after more than US$65 billion of Chinese capital entered the sector. Policy reversals reduce predictability for EV, metals, and industrial supply-chain investments linked to downstream processing.

AI Chip Export Tightening

Taipei is considering broader AI-chip controls on China, potentially criminalizing unauthorized exports and extending restrictions beyond blacklisted firms. The move would increase compliance burdens for semiconductor and server makers, while raising retaliation and market-access risks for Taiwan-linked technology trade.

Labor Mobilization and Productivity Pressure

Extended reserve mobilization is constraining labor availability and output across sectors. Surveys indicate 31% of respondents saw wages or income decline since the war began, with self-employed and lower-income groups hit hardest, adding pressure on operating costs, hiring, and execution capacity for businesses in Israel.

Nearshoring gains remain constrained

Mexico retains strong structural advantages, including deep US integration and a position supplying nearly 17% of the US market, yet nearshoring conversion remains limited by trade uncertainty, power and infrastructure bottlenecks, and security concerns, slowing greenfield execution and supply-chain relocation.

Energy Export and Grid Expansion

Ottawa is prioritizing energy expansion, transmission links and permitting reform, while electricity demand is expected to double by 2050. New LNG, pipeline and intertie projects could improve export diversification and industrial competitiveness, but execution, consultation and regulatory timelines remain decisive business variables.

Fuel Export Controls Tighten

To protect domestic supply, Moscow has restricted gasoline exports and suspended kerosene exports until November 30, while diesel curbs remain under consideration. These measures may stabilize local markets but reduce export flexibility and complicate regional fuel, aviation and freight supply planning.

Border Corridors and Nearshoring Logistics

Turkey is strengthening its role as a regional logistics hub through new border and rail initiatives. Plans with Bulgaria would expand Kapıkule capacity, while a Saudi-Turkey land corridor could cut Gulf-Europe transit from over 30 days to under two weeks and reduce maritime chokepoint exposure.

Supply-Chain Due Diligence Tightens

The US tariff dispute has intensified scrutiny of Australia’s modern-slavery regime, which currently emphasizes disclosure more than enforcement. Businesses should expect stronger due-diligence expectations, possible import controls, and higher supplier-tracing costs, especially for goods sourced through Southeast Asia and China-linked networks.

Fiscal Strain and Budget Uncertainty

France’s 2027 budget faces acute uncertainty amid minority government constraints, with deficit risks rising from a 5% target to 6–7% of GDP if delayed. Debt could exceed 120% of GDP by 2028, increasing tax, subsidy and spending-cut risks for businesses.

Energy Reform Lowers Power Risk

Electricity supply has improved materially as Eskom’s monopoly weakens and private generation expands through rooftop solar and independent power producers. Lower blackout risk supports manufacturing continuity, cold chains and investor confidence, though fuel vulnerability and uneven municipal distribution still threaten operating costs.

EU Digital Trade Expansion

The EU and South Korea signed a digital trade agreement aimed at easing cross-border data flows, reducing unnecessary barriers, and improving legal certainty. The deal supports tech, services, and platform companies, while reinforcing broader semiconductor and supply-chain cooperation with Europe.

Mandatory Onshore Export Proceeds

New DHE rules require non-oil resource exporters to keep 100% of export earnings domestically for at least 12 months, while oil and gas exporters must retain 30% for three months. This reshapes treasury management, liquidity planning, and trade-finance structures.

Seabed Infrastructure Security Focus

Australia has elevated protection of subsea cables and maritime chokepoints after multiple cable incidents in the Taiwan Strait and Baltic. This increases relevance of cyber-physical resilience, port and telecom contingency planning, and insurance considerations for trade-dependent operators.

China and Gulf Investment Push

Pakistan is actively courting Chinese and Gulf capital in ports, energy, infrastructure, agriculture, and IT. CPEC Phase 2.0 and Saudi investment talks may create selective opportunities, but execution risk remains high due to governance gaps, security issues, and regulatory inconsistency.