AGP Executive Report

Global Outlook: Middle East conflict, disrupted energy supplies, higher borrowing costs and rising public debt are set to dominate IMF and World Bank meetings in Bangkok, as risks to growth and inflation mount. China-EU Trade: Beijing and Brussels reached 16 points of agreement, including exploring tariff cuts and addressing hybrid-vehicle trade, in a bid to steady ties between two major trading partners. U.S.-China Trade: A new framework identifies about $30 billion in goods on each side for possible tariff reductions. U.S. farm groups say lower tariffs could help exports compete, but sales are not guaranteed and whole soybeans are excluded. India Industry: A draft steel policy targets 604 million tonnes of capacity by 2047, while seeking to cut emissions and reduce reliance on imported coking coal. U.S. Manufacturing: Some producers say tariffs have sharply raised input costs, while higher shipping charges add pressure—an economic strain feeding into the midterm campaign.

China–EU Trade: Beijing and Brussels agreed to keep trade ties stable, improve market access and explore tariff cuts, easing immediate tensions over vehicle exports. Their next trade consultation is scheduled for March 2027. Canada–India Ties: Nearly 300 Canadian business delegates will join ministers on a trade mission to India as the countries push to conclude a trade pact. Ukraine’s Economy: Russian strikes have halted operations at Kryvyi Rih’s major steel and mining complex, deepening pressure on local services and Ukraine’s strained budget. U.S. Debt: The Congressional Budget Office chief warned that even strong growth is unlikely to stabilize federal debt on its own, pointing to the need for political choices on spending and revenue. Kuwait Reforms: Kuwait is advancing financial and economic reforms to diversify funding, attract investment and support development under its Vision 2035 agenda.

Trade: Malaysia and Egypt will use a joint commission next year to expand trade, investment and flight links; bilateral trade has risen 74.7% this year, though from a low base. China–EU ties: Beijing and Brussels reached preliminary agreements to explore tariff cuts, ease market-access frictions and stabilize trade, including talks on electric and hybrid vehicles. Growth measures: China says it will step up fiscal support and expand domestic demand. Infrastructure: Malaysia’s works ministry received RM10.88 billion for 2027, up 1.78%, with major funding for highways, roads and bridges. Regional commerce: Cambodia and Vietnam reaffirmed a $20 billion trade target and pledged to improve cross-border links. Business incentives: Jordan’s cabinet approved support covering up to 75% of port container-handling costs for manufacturing and assembly projects in Aqaba. U.S. economy: Consumer confidence fell to its lowest level in more than a decade as September hiring disappointed and unemployment edged higher.

EU-China Trade: Beijing and Brussels reached an initial deal that could halve Chinese hybrid-car exports to the EU, while pledging to stabilize rare-earth supplies and keep trade talks going. China’s Economy: Beijing is freeing up 550 billion yuan in unused local-government borrowing quotas for budgets and infrastructure, alongside broader pro-growth measures. Canada Jobs: The economy shed 68,000 jobs in September, adding to concerns about the labour market. Global Trade: The WTO has raised its 2026 goods-trade growth forecast, even as UNCTAD expects growth to slow from last year. Nigeria Fuel Policy: A 30-day petrol discount has sparked a dispute over whether public funds are involved, with critics demanding details of the cost.

Malaysia’s Fiscal Policy: Subsidised fuel purchases reached RM18 billion by August, as the government expands targeted aid while seeking stronger public finances and protection for vulnerable households. AI and Growth: A UAE minister says AI agents could let one-person businesses scale to billion-dollar valuations, with firms already using agents to boost productivity. Budget 2027: Malaysia’s government says the budget should support growth and ease living costs after the economy expanded 5.7% in the first half of 2026. Drug Costs: India will cap trade margins on non-scheduled cancer medicines at 30% of retail prices, with officials projecting savings of about ₹2,500 crore a year. Trade: Malaysia and South Korea expect bilateral trade to exceed US$40 billion this year after concluding FTA negotiations; meanwhile, India and ASEAN are accelerating talks to update their goods pact. EU and Chinese officials are also seeking to ease trade tensions amid a €1.12 billion daily deficit.

China–EU Trade: China’s commerce chief met the EU trade commissioner in Beijing as tensions over Chinese exports and the yuan mount; Beijing rejected claims it weakens its currency to gain an export edge. Nigeria’s Fuel Policy: The government announced a 30-day petrol discount at NNPC stations, prioritizing public transport operators, as high fuel costs pressure households and businesses. Portugal’s Budget: The central bank chief urged the country to prepare for external shocks. The 2027 budget targets a 0.1% surplus and lower public debt, which the finance minister says should be preserved. Rwanda’s Growth: GDP rose 9.7% in the first half of 2026, led by industry and services; the central bank projects 7.8% growth for the year but warns of risks from conflict and trade disruption. Canada’s Investment: Ottawa pledged $2 billion for home-efficiency upgrades aimed at one million households, with lower heating costs and emissions among the goals. Gulf Connectivity: The UAE and Saudi Arabia agreed to study cross-border rail links and electricity connections to improve trade and energy integration.

Skills and Growth: Malaysia says its move into higher-value industries depends on stronger links between employers and training institutions, with new education and vocational plans aimed at supplying skilled workers. Trade Deals: The UAE and Thailand have concluded negotiations on a trade pact expected to cut barriers and expand investment in manufacturing, logistics, food security and digital trade. T&T Outlook: Economists warn that Trinidad and Tobago faces slowing growth, job losses and foreign-exchange shortages, and question the World Bank’s forecast of a 2.5% rebound in 2027 after two years of contraction. Tax Reform: India’s finance ministry is proposing to decriminalise many GST offences and speed up refunds, part of a shift toward trust-based tax administration. Europe’s Economy: Germany raised its 2026 growth forecast to 1.3%, citing resilient activity and AI-related demand, while EU officials urged France to pass a 2027 budget as borrowing costs climb. UK-India Trade: Business Secretary Jonathan Reynolds will lead company executives and regional mayors to India to build on the countries’ trade deal and pursue new partnerships.

EU-China Trade: Brussels opened talks in Beijing over a goods deficit topping €1 billion a day and Chinese restrictions on rare-earth exports, as EU lawmakers press for a tougher response. India-US Deal: Negotiations have stalled, with India’s finance minister citing little room to compromise; tariffs tied to Russian oil purchases and a US industrial-capacity probe remain obstacles. Global Trade Rules: The US, EU, India and 12 other economies called for action against excess manufacturing capacity and market-distorting policies, warning that countries may otherwise defend their industries individually. Economic Outlook: IMF chief Kristalina Georgieva warned of a difficult 2027, citing energy costs, rising public debt, inflation and risks from the AI investment boom. US Rates and Jobs: September Fed minutes showed unanimous support for a rate hike, but subsequent data—including just 29,000 jobs added—has shifted the outlook.

Malaysia Budget: Prime Minister Anwar says Friday’s 2027 budget will aim to ease living costs and spread the benefits of growth more fairly. Digital Commerce: Malaysia’s communications regulator is coordinating with platforms and ministries on seller checks and action against illegal listings, amid concerns about impacts on small businesses and retailers. India’s Economy: The RBI raised its policy rate by 25 basis points to 5.50% and lifted its FY27 growth forecast to 7.1%; the rupee remains under pressure. Global Risks: IMF chief Kristalina Georgieva warned that the AI investment boom, energy disruptions and mounting government debt could fuel inflation and widen inequality, urging policymakers to stay cautious. Trade Tensions: India and the US remain far apart on tariffs and market access, with talks described as having reached a plateau. Emerging Markets: Ghana’s cabinet approved a formal application to join BRICS, seeking to diversify its economic partnerships.

U.S. Trade Watch: The U.S. trade deficit jumped to a 17-month high in August, reaching $105.6B as imports rose faster than exports—fuelled by petroleum, gold and AI-related chips. India-U.S. Negotiations: India’s finance minister said the trade talks have hit a “plateau,” with tariffs now “weaponised” and further concessions getting harder. Black Sea Shipping Risk: Drone attacks in Bulgaria’s exclusive economic zone sank one merchant ship and damaged another, prompting emergency security meetings as Ukraine and Russia trade blame. AfCFTA Reality Check: A survey of African CEOs finds strong optimism for cross-border growth, but trade finance is hard to access and intra-African exports still sit around 15–18% of totals. Green Industry Push: Qatar is exploring “waste-to-fuel” technologies to turn food scraps and biomass into compost and alternative energy. Local Growth Funding: Malaysia’s film industry says government-backed support is lifting quality and box-office performance, with incentives aimed at attracting more investment. Agriculture Costs Relief: U.S. officials urged states to expand access to dyed diesel for farmers and harvest-related trucking to ease high fuel prices.

Middle East Security & Trade Routes: Saudi-backed Yemen forces launched a major offensive to retake areas around Bab el-Mandeb, pushing Houthis back and threatening a key Red Sea shipping corridor that already has energy markets on edge. Aviation Decarbonization: IATA marked the 10th anniversary of CORSIA, urging governments to strengthen the global framework for aviation emissions; the scheme is set to cover most emissions from 2027 and mobilize up to $120bn. EU Trade Policy: France and Germany are pushing a faster EU trade defense tool aimed at “systemic market-distorting practices,” with China likely in focus—sparking warnings it could undermine the trade order. India–Europe & Bilateral Trade: Finland’s envoy said “huge possibilities” could double India-Finland trade (about $3bn now), helped by the India-EU FTA framework. Energy Transition & Industrial Policy: Indonesia’s new coordinating ministry for downstreaming and energy transition aims to accelerate clean power and replace about 13GW of diesel generation with solar, while Nigeria’s manufacturers warn energy costs and imported inputs are squeezing local industry. Markets Watch: India’s Sensex and Nifty closed higher ahead of the RBI decision, with investors rotating into banks, pharma and capital goods.

Iraq Economic Stimulus: Iraq approved about $2.7bn (IQD 3.5tn) in stimulus covering housing finance, industrial lending, contractor arrears, farmer dues, and a bigger Generations Fund—aimed at speeding implementation through the finance ministry, central bank, and banks. Trade Policy & Costs: The U.S. Trade Representative opened public comments on the US-Mexico-Canada deal without asking what tariffs cost American households, while analysts cite CBO estimates that most tariff costs land on consumers via higher prices. India–U.S. Trade Talks Plateau: India’s finance minister said room for concessions is “very, very difficult,” as tariff disputes and energy-policy constraints narrow the path to a deal. Moldova EU Push: Moldova unlocked a €157m tranche under the EU Growth Plan after reforms, while Estonia opened a permanent mission in Chisinau and a US-backed working group advanced the Straseni–Gutinas power line. Energy & Trade Corridors: India revived the Brahmaputra freight route with a 540-ton methanol cargo to Bangladesh, testing river trade potential for the Northeast. AI Governance: Canada’s PM Mark Carney will take an active role in Ottawa’s new AI advisory council, signaling an “all of government” approach. Middle East Pressure: Iran’s oil minister resigned amid US sanctions and a naval blockade, with leadership shifting as exports face tighter constraints.

Monetary Policy Watch: India’s RBI is widely expected to hike the repo rate by 25 bps in October as inflation stays above target and higher crude prices pressure the rupee and import bill. Fiscal & Market Confidence: Japan’s PM Sanae Takaichi pledged a cut in consumption tax on food without new bonds, pairing it with cash support and a five-year investment plan focused on AI, semiconductors, and cyber defense. Trade & Investment: WTO chief Ngozi Okonjo-Iweala said 72% of global goods trade still runs under WTO rules despite tariff shocks and the Iran war’s energy disruption. Regional Growth Signals: AMRO lifted Malaysia’s growth forecast to 5.1% for 2026 on AI-related exports and investment, while warning inflation stays manageable but services recovery needs work. Public Finance & Services: The UK’s DWP plans to adjust the “triple lock” state pension from 2030 to curb outsized increases in high-wage years. Energy Corridor Ambition: Türkiye’s Development Road Project is pitched as an energy and trade corridor worth up to $80bn annually if scaled for oil, gas, and electricity flows. Local Economy & Infrastructure: India’s Assam revived the Brahmaputra freight route with a Dibrugarh-to-Dhaka methanol shipment, testing the river as a commercial corridor. Governance Capacity Building: The UAE and World Bank launched an exchange programme to help African governments modernise bureaucracy and cut administrative burdens.

Modern Slavery & Labor Rules: Australia’s Business Council warns proposed criminal liability for modern slavery in supply chains could hit productivity and raise inflation, while also flagging knock-on risks from curbs on non-compete and no-poach deals. Monetary Pressure: India’s market slide deepened for a record 8th straight week as energy costs, bond-yield spikes, and foreign outflows weighed on stocks and the rupee, keeping RBI policy in focus. Pakistan Trade & Tax: Pakistan’s cotton output hit 3.208m bales but prices fell amid pest and dry-weather pressure; meanwhile, farmers and the Kissan Board demand wheat and sugarcane support prices, and the Multan Tax Bar Association urges FBR to restore a workable TY26 filing timeline after IRIS delays. Digital Payments: Pakistan’s 1LINK expects payment transactions to top 12bn in 2026, underscoring the push toward a larger digital economy. Energy & Geopolitics: Iran’s oil minister resigned as Tehran faces continued export pressure, while Yemen’s coalition reiterated support for the legitimate government amid renewed offensives. Trade Policy & AI: The US appointed Jay Clayton to lead an AI policy task force with a 120-day mandate, as global trade talks and tariff disputes continue to shape business planning.

G20 Trade Talks: China said the Milwaukee G20 meeting ended without agreement on overcapacity and forced labor, after “divergent opinions” tied to US tariffs; it backed a joint statement on food security but no outcome documents on the other issues. Central Banking: India’s RBI is widely expected to hike the repo rate by 0.25% in October as West Asia-linked energy and commodity pressures keep inflation risks elevated. Energy & Trade Resilience: A former Singapore foreign minister warned India and China are better placed for Strait of Hormuz disruptions thanks to diversified sourcing and stockpiles, though India may still buy some Russian oil. Regional Integration: ASEAN moved toward signing the Digital Economy Framework Agreement in November, aiming to make cross-border digital skills more usable for employers. Tax Policy: Uganda’s tax incentives face a value-for-money test as a study estimates tax expenditures hit Shs5.01tn in FY2024/25 (about 2.2% of GDP). Public Finance & Jobs: The World Bank is nearing approval of Jordan’s $200m Youth, Technology and Jobs project restructuring, extending timelines and shifting funds toward wage incentives and on-the-job training.

Macroeconomic Policy & Inflation: Australia’s Treasurer Jim Chalmers faced fresh political heat after a rate hike and inflation uptick, with Cabinet Secretary Andrew Charlton defending the government as it manages housing and cost-of-living pressures amid tough global conditions. Trade & Economic Security: India’s PM principal secretary P K Mishra warned that tariffs, export controls and sanctions are increasingly used for strategic aims—sometimes “weaponised”—as energy, food and chokepoints raise uncertainty. Development Strategy: India’s VP C P Radhakrishnan argued the country can be called “developed” only with inclusive growth and consensus-driven policymaking grounded in local realities. Energy & Market Stability: Bangladesh’s energy ministry met LPG importers amid supply shortages and overpricing claims, as consumers report cylinders costing far above regulated rates. Regional Integration: East African Community speakers agreed to push governments to clear unpaid contributions to tackle a $125m debt burden. Industrial & Infrastructure Push: Tanzania says six Bagamoyo eco-maritime projects are now under construction, targeting 15,000 jobs and linking ports, rail and a tech park. Digital & SME Growth: Ghana urged SMEs to adopt digital tools to cut waste and boost jobs, while Malaysia’s PM Anwar Ibrahim urged youth to master AI and quantum to drive growth. Global Trade Shifts: Malaysia reported manufacturing-led trade growth, with electrical and electronic exports still driving gains.