AGP Executive Report

Critical Minerals & Industrial Policy: UNCTAD’s latest trade update flags soaring demand for copper, nickel, lithium, cobalt and rare earths, but also heavy supply concentration in a few countries—raising risks for developing exporters that mainly ship raw material. EU Tax Enforcement: A new EU report says illicit cigarettes now exceed 10% of consumption, driven largely by counterfeiting, reopening Brussels’ push for faster crackdowns. Moldova Economic Reset: Moldova is consulting a 2027 fiscal policy aimed at simpler, more competitive taxes—cutting wage tax rates, speeding VAT refunds, and zero-rating reinvested profits—while also boosting natural gas security stocks and negotiating visa-free travel with Tunisia. Trade Talks & G7 Pressure: Canada’s Carney joined a G7 call with China on global imbalances; meanwhile, Canada’s LeBlanc expects side deals alongside CUSMA talks as Trump signals uncertainty over renewal. Energy & Sentiment: Thailand’s consumer confidence fell to a 42-month low amid Middle East tensions and high energy costs. Pakistan Growth Snapshot: Pakistan’s Economic Survey pegs FY2025-26 growth at 3.7% and economy size above $452bn, with reserves and tax base improving. Defense Funding Shock (UK): UK Defence Secretary John Healey resigned over a plan he says falls short as threats rise, deepening Starmer’s political strain.

Middle East Trade & Security: US and Iran traded airstrikes for a second day, with Kuwait closing airspace and Bahrain sounding missile alerts, pushing oil prices higher and raising risks for regional shipping and energy costs. South Asia Budgets & Governance: Pakistan’s NEC approved a 2026-27 development budget of 3.669tn rupees and set 4% growth, while its Economic Survey flags missed targets and a May inflation spike. South Asia Finance Politics: Nepal’s finance minister, Swarnim Wagle, welcomed investigations over alleged budget errors and challenged claims of an EV information leak. Bangladesh Fiscal Push: Bangladesh’s finance team is preparing an expansionary FY27 budget aimed at building a “welfare state,” alongside a new 3R recovery plan. Trade & Investment Deals: Saudi Arabia lifted a roughly five-year Lebanese import ban, signaling support for Beirut’s recovery; Indonesia and Canada explored deeper cooperation after ICA-CEPA. Policy for Competitiveness: Bulgaria approved an electricity compensation scheme for energy-intensive firms, tying support to decarbonization and efficiency investments. AI for Small Business: New Zealand will expand AI-powered support for small firms via AcceleratorNZ and mentor tools. Global Finance Risk: South Africa’s central bank warned rising developed-economy debt and refinancing could threaten global financial stability.

Trade Shock in North America: Trump said he’s “not looking to renew” CUSMA, warning the U.S. doesn’t need Canada or Mexico and setting up a July 1 fight over autos and other key sectors. Central Banking Watch: Bank of Canada held rates at 2.25%, sounding “dovish” while economists say it kept “wiggle room” amid duelling risks from weak growth and sticky inflation. Ghana Growth Update: Ghana’s Q1 2026 GDP rose 6.4%, led by services (ICT up 25.2%) and a rebound in industry from mining and oil recovery. Iran Escalation & Sanctions: U.S. Treasury sanctioned Iran-linked procurement networks under “Economic Fury” as strikes and counterstrikes threaten to derail ceasefire talks. AIIB Budget Support: Bangladesh signed a $250m AIIB loan for economic management and governance, aiming to protect spending and stabilize the economy amid geopolitical pressures. Regional Trade Facilitation: Kenya’s business council and consulate pledged to cut barriers to intra-EAC trade, targeting faster cross-border commerce at Namanga. Infrastructure Execution: Ghana replaced the contractor on the Bogoso–Prestea road and requested 1,000 more road-sector staff to fix supervision gaps. EV Charging Economics (UK): A new report projects EV charging’s added value could reach £15.5bn by 2035, boosting jobs across the supply chain.

Middle East Shock to Food Prices: The World Food Programme warns the Iran conflict could push 45 million more people into severe food insecurity by June, as higher fuel costs and disrupted trade hit vulnerable countries, with UN funding cuts forcing aid rationing. Geopolitics Meets Markets: Fresh US-Iran strikes near the Strait of Hormuz and wider regional retaliation keep pressure on energy and shipping, while analysts flag knock-on effects for growth and public finances. Oil Price Spillover for India: India faces a prolonged oil-price hit as analysts cut growth forecasts and the rupee comes under strain; refiners are shifting supply toward Russia and other sources to plug gaps. Central Banking Watch: The Bank of Japan is widely expected to lift rates toward 1% to curb inflation risks tied to crude-price pressures. EU Sanctions and Trade Friction: The EU is expanding sanctions pressure on Russia’s war economy, including energy and crypto-related measures, while drug-trafficking routes and violence remain a growing policy concern. UK Cost-of-Living Jobs Push: Major retailers urge the UK government to act on youth unemployment, warning the “ladder of opportunity” is wobbling. Kenya Ebola Quarantine Row: Protests over a proposed US-funded Ebola quarantine facility are turning into a sovereignty and governance dispute, with courts ordering disclosure of deal details.

Middle East spillovers: The Iran war is pushing up food and fuel costs and disrupting global trade, with the World Food Programme warning tens of millions could face severe food insecurity as US funding cuts force aid rationing. Energy chokepoint risk: US Energy Secretary Chris Wright says ship traffic through the Strait of Hormuz is rising “very meaningfully,” but normal flows could take months to restore—keeping inflation pressure and supply-chain stress front and center. South Asia pressure: India’s opposition urges the government to absorb higher crude costs instead of passing them to consumers, as oil-price shocks and subsidy cuts threaten demand and growth. Bangladesh support & jobs: Japan signed a $312m concessional loan to bolster energy security and resilience; meanwhile, Bangladesh’s Startup Bangladesh has invested Tk 1.09b in 36 startups, and the labour minister called for stronger regional cooperation to tackle unemployment and skills gaps. Policy and state control: Armenia’s government is drafting a resolution to nationalize Electric Networks of Armenia (ENA) and move it to state control. IMF backing: Nigeria says the IMF endorsed its reforms under Tinubu, citing improved macro stability and FX operations. Regional integration push: ASEAN leaders, including Cambodia’s Hun Manet, urged members to resist fragmentation and deepen economic integration amid global instability.

FX & Inflation Watch (Nigeria): The naira opened the week weaker across official and parallel markets, with NAFEX down to about N1,362.84/$1 as traders pointed to tighter compliance under the CBN’s updated Foreign Exchange Manual. Energy & Governance (Nigeria): President Tinubu swore in a new Power minister and a Foreign Affairs minister of state after resignations, as the administration pushes reforms aimed at stabilizing electricity supply and restoring investor confidence. Education Sector Reform (Zimbabwe): Zimbabwe’s higher-education minister ordered structural and digital changes at TESC and ZIMCHE, including budget “Blue Book” listing, HR systems, and salary reviews to curb inefficiencies and brain drain. Trade & Jobs (UK): The CBI warned UK unemployment could hit 5.5%—the highest since 2015—citing weaker growth and Iran-linked energy and inflation pressure. Global Trade Logistics: Air cargo got its moment at IATA, with executives arguing it’s profitable and essential to global supply chains despite mounting structural strain. Middle East Risk: Iran-Israel strikes resumed after a ceasefire, raising the odds of renewed regional escalation and fresh economic shock. Local Enterprise Support (South Africa): A nationwide campaign will help spaza shops access the R500m support fund, targeting licensing and compliance gaps.

Regional Trade & Connectivity: Georgia, Türkiye and Azerbaijan wrapped a 10th trilateral foreign ministers meeting in Istanbul and signed the “Istanbul Declaration,” with leaders pointing to the Baku-Tbilisi-Kars railway as a driver for trade and economic progress. Food Security & Energy Risk: FAO warned that Strait of Hormuz disruptions are a global fertilizer and production shock, urging countries to keep agricultural input trade open and use fertilizers efficiently. Oil Market Reality Check: Opec+ raised quotas again, but analysts say delivery constraints mean the move is more symbolic than supply-changing amid Hormuz-linked logistics strain. Monetary Policy Watch: India’s RBI held rates at 5.25% and signaled a data-dependent stance as fuel, freight and monsoon risks threaten inflation beyond isolated price spikes. Trade Policy: Bangladesh’s commerce minister said the trade deficit widened by about $8bn over five fiscal years to $24.16bn, citing higher import costs and weak export growth. AI for Business: The UK announced £200m to speed AI adoption by firms, including BridgeAI expansion and AI Growth Zones for local workers and businesses.

Middle East Risk Premium: Israel and Iran traded retaliatory strikes again, threatening to unravel a fragile truce and pushing Brent crude higher, rattling global markets and adding inflation risk. FX & Rates Watch: South Korea’s central bank and finance ministry warned of excessive FX volatility and one-way moves, pointing to speculative offshore NDF activity as the won weakens. South Asia Growth Strategy: Vietnam’s deputy central bank governor said monetary policy room is narrow, so the country will lean more on targeted expansionary fiscal policy to hit growth while keeping inflation controlled. Energy Efficiency Push: Türkiye targets $20B+ in energy-efficiency investments by 2030, aiming to cut energy use and emissions. Trade & Integration: WTO pledged continued Aid for Trade support for Bangladesh to boost infrastructure, productive sectors, and export diversification. Regional Diplomacy With Economic Stakes: ASEAN Future Forum 2026 in Hanoi will focus on growth models, AI, energy security, and value-chain participation. Housing Supply Lesson: Ireland’s housing warning from 2014 is resurfacing as shortages persist, with renewed debate over “help to buy” versus “help to build.”

Trade & Logistics Tech: India’s Home Minister Amit Shah will launch the Land Port Management System, a digital platform to integrate land-port cargo and passenger processing, cut border delays, and enable single-window clearances. UAE Trade Performance: Dubai’s DIEZ logged record 2025 trade of about Dh491bn (+46%), boosting Dubai’s non-oil trade share to 16% and underscoring continued goods-flow momentum. Middle East Energy Shock: With the Israel-Iran conflict nearing 100 days, global institutions warn of weaker growth, higher inflation, and supply-chain damage—raising pressure on consumer costs and shipping risk. Jobs & Politics in the US: New York Mayor Zohran Mamdani says Democrats are losing working-class voters by not focusing enough on housing, healthcare, and grocery costs. Canada Growth Wobble: Canada’s two-quarter GDP decline revives “technical recession” talk, though economists urge looking beyond GDP to unemployment and broader conditions. Iraq Investment Push: Iraq’s new oil minister promises better terms for foreign firms, aiming to expand production, end gas flaring, and improve export infrastructure. AI & Copyright Policy: A push for collective licensing is gaining traction as AI adoption scales and regulators demand clearer, lawful access to content.

Trade Diplomacy: India and the US are racing to wrap the first phase of a bilateral trade deal by mid-July, with a July 22 tariff deadline adding urgency. Energy & Cost of Living: India’s domestic LPG supply cost has jumped above ₹1,600 per cylinder after Strait of Hormuz disruptions, but the government keeps consumer prices capped—₹29 hike announced, with PMUY beneficiaries effectively paying ₹642. Geopolitics & Growth Risks: The US-Iran confrontation is driving a global energy shock, raising recession risk as trade routes and commodity flows get hit. Capital Flows & Markets: Early signs of AI trade cooling in the US could slow foreign selling and potentially bring some FPI back to India, as analysts watch rupee pressure and RBI/government measures. Labor & Fiscal Pressure: Trinidad and Tobago faces renewed scrutiny over supplementary spending to settle long-delayed wage obligations, with economists warning borrowing could worsen fiscal strain. Migration Politics: South Africa vows “no shutdown” on June 30 as xenophobic tensions rise around undocumented migrants, while Pakistan’s interior minister continues shuttle diplomacy tied to US-Iran talks. Regional Economy & Infrastructure: Pakistan’s Sukkur Barrage canal system is short on irrigation water, threatening Kharif crops and exposing governance and distribution fault lines.

Bangladesh Economic Model Push: Adviser Rashed Al Mahmud Titumir says Dhaka is building a “Bangladesh for All” plan to reach a $1tn economy by 2034, anchored in investment growth, industrial revival, admin reform and long-term agriculture upgrades, alongside a Tk 60,000 crore restructuring package. Rural Finance Boost: Information Minister Zahir Uddin Swapon announced a full waiver of agro loans up to Tk 10,000 (principal and interest) for marginal farmers to protect rural demand amid heavy debt burdens. Tax-Admin Reset: Finance Minister Abduljabbar Ahmed urged a “strategic partnership” between tax/customs and taxpayers, stressing faster closure of old cases and simpler procedures after merging the authorities. Trade & Investment Diplomacy: Saskatchewan’s delegation heads to China to deepen agri trade; Canada’s PM Mark Carney met Indonesia’s Prabowo to advance CEPA-linked investment in clean tech and agri-food; Bangladesh and Türkiye agreed minister-level defence and foreign affairs committees plus annual 2+2 talks. Geopolitics Hitting Markets: West Asia tensions and Strait of Hormuz disruption fears remain a key risk for energy and trade flows. India Growth & Policy: PM Modi’s Economic Advisory Council review focused on resilience amid West Asia shocks; India targets 50% semiconductor self-reliance by FY35. Regional Business Climate: Bahrain Chamber reactivated a Strategic Thinking Group to strengthen research and policy recommendations for private firms. Canada Local Economy Watch: Saskatchewan job losses drew fresh opposition attacks as unemployment and youth joblessness rise.

India Growth & Reform Narrative: PM Narendra Modi and Defence Minister Rajnath Singh pointed to 7.7% FY26 GDP growth (7.8% in Q4) as proof India remains the world’s fastest-growing major economy, crediting “Reform, Perform, Transform” and infrastructure plus welfare spending. RBI FX & Rates Watch: RBI held the repo at 5.25% but signaled caution—raising inflation forecasts and trimming FY27 growth—while analysts expect FX inflow support from concessional swaps, hedging coverage, and bond-market access, even as crude and monsoon risks linger. Emerging-Market Currency Moves: Indonesia’s central bank and finance ministry agreed to boost asset yields to pull portfolio inflows and defend the rupiah after heavy outflows. Trade Diplomacy Under Pressure: US–India talks stayed upbeat as Trump said a deal is “within reach,” while Sri Lanka’s deputy finance minister said it’s negotiating to remove a proposed 12.5% US duty tied to forced-labour concerns. Regional Integration Push: Namibia urged firms to use AfCFTA to expand trade beyond borders, and SADC ministers adopted legal instruments to speed regional cooperation, tourism, health, and pooled procurement. Labour Costs & Policy: Kenya set new minimum wages for domestic workers after Ruto’s directive, while Bulgaria’s finance leadership said it will target long-term spending cuts rather than quick tax hikes to rein in deficits.

Regional Trade & Health: SADC adopted new legal instruments to speed integration, including a Tourism Univisa to ease travel and a charter for pooled procurement of pharmaceuticals to cut medicine costs, while also pushing consultations to revive the SADC Tribunal. Caribbean Diversification: Prime Minister Dr. Godwin Friday urged borrowing member countries of the Caribbean Development Bank to prioritize economic diversification and strengthen social protection as the CDB meeting focused on resilience amid uncertainty. Pakistan Fiscal Moves: Pakistan’s ECC approved Rs7.03bn for an SDG achievement programme and additional sector grants, including defense and interior/narcotics control spending. US-India Trade: India’s commerce minister Piyush Goyal said the first phase of a bilateral trade deal is likely by mid-July, with talks aimed at closing remaining “open ends,” as Trump publicly signaled progress. US Labor Signal: The US added 172,000 jobs in May, but economists flagged weak wage growth versus inflation as a key affordability pain point. Russia Economy Under Strain: At SPIEF, Putin admitted slowing momentum, while Russian billionaires criticized tight monetary policy as a “trap,” with growth expected to cool. Energy & Food Costs: Nigeria’s HURIWA condemned a cooking gas price surge as economic cruelty, warning it’s pushing households toward hunger. AI Governance: Canada launched its National AI Strategy, while business leaders emphasized the need for AI governance policies to manage privacy and security risks.

Trade Diplomacy: UK and India say free-trade implementation talks are moving fast, with any steel-related friction unlikely to reopen the deal, though timing could slip. Tariffs & Bargaining: The US is pushing new forced-labour-linked tariff proposals, and analysts call it “pressure” to secure a tougher bargain in India talks. Monetary Policy: India’s RBI kept the repo rate at 5.25% for a second straight meeting, citing West Asia-driven energy risks and rupee weakness while keeping a neutral stance. Capital Flows: India scrapped capital gains and withholding taxes on foreign investors’ government bond holdings to attract inflows and ease balance-of-payments pressure. Global Outlook: OECD warns the Middle East conflict could drag growth toward recession if disruptions persist into 2027, with higher inflation risks. AI & Labor: South Korea’s labour minister urged big tech firms to share excess AI windfall profits with suppliers and workers to narrow inequality. Energy Policy: Japan’s economy ministry set numerical targets for replacing decommissioned nuclear reactors, aiming to sustain a 20% nuclear share by 2040. Regional Growth Links: Korea and Serbia signed a CEPA to cut tariffs on most goods and deepen supply chains for chips, EVs and auto parts. FX Watch: Korea’s finance minister said “extra vigilance” is being taken on FX volatility as recovery continues.

Trade & Regulation: Canada is reviewing rules that required foreign streamers to invest 15% of revenues into Canadian content, as writers and filmmakers warn the shift could raise uncertainty for the film and TV sector. Jobs & Retail: South Africa’s Employment Minister stepped in to pause Pick n Pay retrenchments affecting 22,000 jobs, pushing talks for alternatives. Energy Shock & Growth Outlook: The OECD warns Iran-related disruptions could keep global inflation elevated and growth weak, with risks of a deep slowdown if tensions persist. US–EU Trade Rules: U.S. Trade Representative Jamieson Greer says tariff caps in deals with the EU and Japan will be respected, while forced-labor probes could still raise tariffs beyond those caps. AI & Security: Canada’s PM Mark Carney says reliance on foreign AI platforms could expose Canadian data and tilt markets against local firms. Tech Industrial Policy: China is rolling out a ministry-province pilot plan to develop independently made 6G solutions by 2029. Regional Connectivity: Turkey says talks with Saudi Arabia aim to revive the Hejaz Railway and extend it toward Oman, plus it is preparing a major development road corridor. Russia Investment Mood: Russia’s capital investment fell sharply in Q1 2026, while Putin’s forum highlighted a split between elites urging prolonged confrontation vs ending the Ukraine war.

US-China Economic Security: Secretary of State Marco Rubio told Congress that competition with China now sits at the center of US diplomacy, driven by economic security, supply-chain risk, and tech leadership. OECD Industrial Policy: Qatar’s finance minister joined OECD talks in Paris on “getting industrial policies right” for open markets, growth, and resilience. India Capital Flows: India is moving to scrap long-term capital gains tax on foreign portfolio investors’ holdings in government securities to attract inflows and support the rupee amid Iran-war and oil-price pressure. US Forced-Labour Tariffs: The US proposes double-digit tariffs on 60 economies over “forced labour” enforcement, with rates of 10% for some partners and 12.5% for others, including Singapore. Middle East Trade Shock: US lawmakers pressed Rubio on Iran’s economic and commercial fallout and urged release of Gavi funding. New Zealand Disaster Levy Debate: NZ’s finance minister said a separate “Community Protection Levy” may be debated, but stressed fiscal constraints and infrastructure spending. Armenia-Iran Trade: Armenia and Iran highlighted cooperation in energy, logistics, and trade-economic sectors. Malawi Farm-Led Recovery: Malawi unveiled a shift from subsidies to mega farms, irrigation, and agro-processing to revive growth and exports.