AGP Executive Report

US Macro: The US economy grew at a sluggish 1.5% in 2Q, with consumer spending holding up while imports weighed on growth and inflation stayed above the Fed’s 2% goal. Middle East Risk: Fresh US-Iran missile strikes ended a brief respite, keeping fuel-price and wider spillover fears on the table. UK Tech Governance: Britain’s AI and digital policy reshuffle after Burnham’s abolition of DSIT puts AI policy in the Prime Minister’s office and moves digital services/cyber under a renamed culture ministry. China AI Push: China’s NDRC says AI is driving fast growth and flags more pilot bases, data sharing, and a long-awaited AI law balancing development and security. China Currency: The offshore yuan hit a 3-year high as Beijing signalled incremental policy support and capital-market resilience. Asia Trade: The Philippines reported a surge in exports—especially semiconductors—while still running a trade deficit; it’s also pushing new FTAs (EU, Canada, updated Japan deal). Global Policy/Trade: Canada’s premiers face pressure to give Ottawa room to negotiate hard with the US as tariff threats loom. South Africa Blue Economy: South Africa links maritime security and port upgrades to Blue Economy jobs, trade resilience, and marine protection. India Courts/Business: An Allahabad High Court ruling says government offices can’t delay business approvals indefinitely, calling unexplained inaction “malice in law.” Malaysia MSMEs: Malaysia says MSMEs grew faster than the overall economy in 2025 and is pushing firms to scale up and export.

US Economy Watch: The U.S. grew at a 1.5% annualized pace in Q2, slower than expected, but consumer spending jumped 3.2% and AI-related equipment investment stayed strong—while imports widened the trade deficit. Monetary Policy: Bangladesh Bank cut its repo rate by 50 bps to 9.5% to spur growth and private credit, citing inflation and balance-of-payments conditions. Trade & Integration: ECOWAS Parliament urged removal of regional trade barriers after border bottlenecks and harassment hurt MSMEs, with exporters complaining it’s harder than shipping to Europe. Infrastructure & Cost Control: Britain renegotiated two major HS2 contracts to save “hundreds of millions” by removing incentives that drove cost escalation. AI & Government Procurement: The U.S. Commerce Department expanded its National AI Center to act as a gateway for federal agencies to adopt commercial AI tech. Regional Economy Signals: Puerto Rico’s 2026 start looks mixed—construction and cruise tourism rose, but activity and consumption softened as inflation stayed elevated.

Fed Watch: The Federal Reserve held rates at 3.50%-3.75% for a sixth straight meeting, citing stubborn inflation and Middle East uncertainty, with markets reacting positively. Japan Macro: Japan cut its fiscal growth forecast to 0.9% for FY ending March 2027 as a weaker yen and higher oil prices squeeze spending; it still expects 1.1% growth in FY2027. China Stimulus: China’s Politburo pledged “incremental” fiscal support after Q2 growth slowed to 4.3%, aiming to boost demand while tackling overcapacity. Europe Growth: Italy’s Q2 GDP rose 0.2% q/q (0.8% “acquired growth”), while Spain’s growth ticked up to 0.7% q/q, supported by tourism. Trade & Diplomacy: China protested New Zealand over remarks by Foreign Minister Winston Peters telling a Chinese-born lawmaker to “go back to your own country,” escalating political friction. Policy & Jobs: Malaysia pushed digital trade access for MSMEs under DEFA, while India debated work-focused education pathways for 14-year-olds and ESIC wage-ceiling questions. Regional Development: Sierra Leone moved to form a National Tourism Federation; Cameroon and Lebanon launched school-feeding and conflict-farm support with EU-linked funding.

Global Growth Watch: Philippines’ Q2 growth may slip to a postpandemic low as inflation stays above target and business confidence weakens, with oil-price risks back in focus. Trade & Tariffs: Canada’s PM Mark Carney pushed back on using energy exports as a bargaining chip ahead of looming U.S. 50% tariffs, arguing reliability matters most. Monetary Policy: The Fed held rates steady as Iran-linked supply shocks keep inflation “elevated,” while the Bank of Canada faces a rebound with lingering risks. AI & Productivity: Fed Chair Kevin Warsh said AI spending is building capacity, and the Fed is setting up task forces to study AI’s impact on jobs and monetary policy. Ease of Doing Business: Trinidad and Tobago’s “Sail Clear” is cutting yacht clearance times, and Zimbabwe reiterated reforms to improve the business climate. Regional Deals: Brazil will start duty-free trade with Singapore under Mercosur, while Kazakhstan says it’s monitoring Wildberries logistics moves. Entrepreneurship & Local Benefits: Singapore’s strategy review highlights scaling entrepreneurship, and Malaysia’s F1 push aims to spread gains to petty traders.

US-Cuba Pressure: Secretary of State Marco Rubio’s “maximum pressure” approach keeps hardening ties with Cuba, with analysts framing it as both a policy legacy and a personal mission. Trade & Sanctions Payments: Russia is reportedly pushing Bangladesh to settle bilateral trade in Indian rupees to ease Western sanctions’ payment friction, with talks slated for later this year. Markets & Rates: Investors are bracing for Fed tightening as oil jumps on Iran-related tensions, raising the risk of a S&P 500 and Nasdaq pullback. Digital Governance: Papua New Guinea’s ICT minister handover spotlights faster rural connectivity and cyber security, while Indonesia expands integrated social aid targeting through a data portal. Public Finance & Reform: Malaysia flags more granular cost-of-living statistics; Mozambique advances performance evaluation rules for state workers; ECOWAS urges harmonised, data-driven governance. Energy Integration: African Energy Week planning calls for cross-border grids and gas pipelines to cut costs and boost energy security. Policy Watch: India’s WTO trade review backs resilience but warns developed-economy goals need deeper structural reforms.

U.S. Farm Aid Uncertainty: Congress is weighing how to distribute a potential $12B farm package, with USDA systems ready but details on programs like the Farmer Bridge Assistance still unsettled. Trade & Growth Signals: The U.S. goods trade deficit narrowed in June as imports fell, but exports dropped to a five-month low—raising concerns for Q2 growth. Consumer Confidence Watch: Americans’ confidence slipped as gas prices rose again amid heightened U.S.-Iran tensions, keeping the economy in a tepid mood. Regional Trade Push: Türkiye and Iraq reaffirmed a $30B trade target, linking progress to customs integration and the Development Road route. Energy & Water Security: Nepal and India agreed to raise electricity export capacity, while Pakistan faces renewed calls for a comprehensive water security policy to cut flood damage. Policy & Jobs Pressure: Ghana’s reintegration grant for evacuees and Nigeria’s education push highlight how governments are trying to translate budgets into livelihoods. Sustainability & Supply Chains: APEC forestry ministers backed action against illegal logging and trade in legal forest products, while Wildberries and Kyrgyz authorities focused on logistics and compensation for damaged goods.

Energy & Utilities Modernization: Romania’s cabinet approved a “state of alert” for energy and hydrology amid diesel-market strain tied to disruptions around Novorossiisk and Middle East conflict, with officials pushing faster market management and infrastructure readiness. Monetary Policy Credibility: S&P said Bank Indonesia’s governor resignation won’t change Indonesia’s sovereign ratings, but could raise uncertainty over future monetary policy direction. Tax & Wages Policy: Malaysia’s economy minister said wage growth must come first before expanding the personal income tax base, responding to OECD calls to broaden taxes; OECD also forecast Malaysia around 5% growth in 2026-27. Trade & Tariffs: U.S. trade officials argued new forced-labor tariffs should have limited economic impact; Turkey’s trade minister said negotiations with the EU, US and others continue to shield Turkish industry from EU protectionism. Cross-Border Infrastructure: Canada opened the Windsor–Detroit bridge to strengthen a key trade corridor even as U.S.-Canada tariff tensions rise. IMF Support: Ghana’s final ECF review cleared a $371m disbursement, marking another step in fiscal stabilization. Digital Economy & Connectivity: Pakistan accelerated 5G and fibre expansion to boost growth, while Malaysia discussed an economic security framework and energy resilience planning.

Trade Policy Shock: The U.S. is pressing for new tariffs and Section 301-style measures, drawing fresh backlash from Finland and warnings that trade wars can’t be “won” with tariffs. North America Infrastructure: A new Canada–U.S. bridge opens in Detroit, aiming to cut friction and speed up a key auto and freight corridor despite ongoing trade disputes. Digital & Security: A major APAC retail cybersecurity push highlights how rapid digital commerce expansion is widening the attack surface for businesses. Energy Transition Under Pressure: Offshore wind scaling faces grid, port, and supply-chain bottlenecks, while North Sea drilling uncertainty is already triggering job-cut threats. Local Governance & Costs: Research links declining local journalism to higher borrowing costs for municipalities, raising the stakes for public oversight. Africa Diplomacy & Water: AU foreign ministers arrive in Addis Ababa for talks centered on sustainable water and sanitation—an economic growth issue as much as a health one. Labor & AI Work: U.S. workplace AI protections are increasingly tied to union coverage, with bargaining seen as the practical guardrail. Policy Implementation Gap: A recurring theme: governments publish plans, but ownership and follow-through often fail—leaving rural communities and workers still waiting on real economic recovery.

UK Economic Tech Push: Britain’s new PM elevates AI to the center of government with a Prime Ministerial AI Taskforce, aiming to speed public-service upgrades and growth. Malaysia Development & Competitiveness: Malaysia’s Economy Ministry reports strong 2026 development-spend momentum and flags 2027 plans of about RM58bn, while officials cite an IMD competitiveness jump to 15th as a magnet for higher-quality jobs. Trade Resilience Deal: Singapore and Australia sign a protocol to keep essential goods flowing during disruptions, including commitments around export restrictions. Georgia Logistics & Climate Rules: Georgia touts a decade-best first-half cargo performance and advances climate competitiveness with emissions monitoring—while also delaying parts of its single-use plastic packaging bans to give businesses time. Forced-Labour Tariff Response: South Africa moves to publish rules to prohibit forced- and child-labour goods after US tariff pressure. Creative Economy Payments: Kenya migrates copyright royalties collection to the eCitizen platform via PAVRISK to improve transparency and reduce leakages. Tourism Investment Angle: Zimbabwe urges diaspora remittances into tourism projects, pitching the sector as a fast route to economic transformation.

Monetary Policy Watch: RBI Governor Sanjay Malhotra said price stability stays the top priority as inflation risks re-emerge, with the next MPC decision to be data-dependent. Trade & Tariffs: Trump’s new Section 301 tariffs face fresh legal challenges after earlier court defeats, with duties covering 80+ countries and 99.4% of U.S. trade; India says it will keep negotiating while 45% of its exports are exempt. Public Finance & Delivery: The Philippines reported infrastructure spending down nearly 43% in the first five months as tighter governance and audits delayed capital disbursements. Climate Policy: Australia’s retirement of Climate Active and pressure to expand carbon pricing into electricity signal a shift away from unlimited emissions offsets. Energy & Geopolitics: U.S.-Iran attacks paused temporarily, easing Gulf shipping and oil-market pressure, while the war’s wider maritime disruptions continue. Industrial Growth: Bangladesh’s MEP Hi-Tech plans a Tk 200cr electronics plant in Mirsarai Economic Zone, targeting about 2,000 jobs. Development Finance: Fiji secured $80m in AIIB sovereign-backed financing for resilience and climate/disaster preparedness reforms.

Trade Policy & Tariffs: India secured a lower 10% U.S. Section 301 tariff tier (vs 12.5% for some rivals) while about 45% of exports remain exempt, easing pressure on exporters as talks continue. Energy & Industry: Jordan inaugurated new natural gas stations in Aqaba to cut industrial energy costs; South Korea extended fuel tax cuts through September amid Middle East uncertainty. Macroeconomic Stability: Ghana’s “economic reset” faces six tests as it transitions from IMF oversight to monitoring, with fiscal discipline and inflation control key. Climate Risk: AfDB warns a “super” El Niño could cost Africa $10–$20B, hit GDP by 1–2% in affected countries, and trigger migration. Digital Finance & Governance: Ethiopia launched a digital finance trade body to coordinate policy and expand inclusion; Kazakhstan approved an AI-backed plan to shrink its shadow economy. Education & Human Capital: India’s education minister Dharmendra Pradhan resigned after NEET leak protests; Pralhad Joshi takes over. Business & Compliance: Zimbabwe reports insurance retreat even as broader financial inclusion rises, with motor policies dominating short-term coverage. Regional Diplomacy: Oman met the Philippines to expand trade, logistics, energy, and tech cooperation.

US Trade & Tariffs: The Supreme Court struck down Trump’s emergency tariff power, but the administration pivoted to new Section 301 duties on 60 economies (10%–12.5%), citing forced-labor rules—sparking fresh pushback from trade partners and already hitting Canadian manufacturers with order losses. Canada Trade Infrastructure: Canada’s Port of Vancouver “Gateway Strategy” fast-tracks approvals for Roberts Bank Terminal 2 to boost non-U.S. exports by 2035. India-US Talks: India says it will keep negotiating a bilateral trade deal after the U.S. imposed a new 10% tariff tier; agriculture access remains the sticking point as an Aug. 1 deadline nears. Middle East Supply Chains: With Strait of Hormuz disruption, Pakistan says goods are rerouted via Saudi Arabia and direct shipping has resumed, while Iran’s government and state TV clash over war-and-talks messaging. Regional Logistics & Digital Trade: Kazakhstan and Russia are digitalizing trade and logistics (smart cargo, AI transport analysis) as turnover nears $28B. Housing & Trade Policy: Canada and the Ismaili Council back affordable housing partnerships in multiple provinces, while Pakistan and others push tax and customs reforms to stabilize trade flows. Protests & Policy: India’s “Cockroach” movement ends after education minister Dharmendra Pradhan resigns over exam leak demands.

Forced-Labour Tariffs: Trump’s new 10%–12.5% tariffs on 60 economies over forced-labour claims sparked pushback from partners, including Australia and New Zealand, as governments warn trade damage and question the basis. Trade Diplomacy: India says it’s still studying US tariff developments while negotiating a bilateral trade framework, aiming to protect exporters as US Section 301 actions reshape talks. US–EU Retaliation Threats: Trump escalated pressure on the EU with a Section 301 investigation threat tied to fines on US tech firms, raising the risk of new tariff rounds. Malaysia Compliance Deadline: Malaysia says it will have two years after ratifying its US reciprocal trade deal to plug forced-labour import gaps and build a clearer mechanism to stop tainted goods entering supply chains. Energy & Growth Projects (Ghana): Ghana is finalising a $500m World Bank oil palm financing deal and advancing modular gas processing plus a 1,200MW gas power plant to cut costs and boost energy security. Digital Trade & E-Commerce: Kenya is drafting a digital services export strategy with World Bank support, while JD.com is partnering with Iraq’s GINI to expand cross-border e-commerce access. Consumer Protection (Estonia): Estonia’s justice ministry drafted a bill to extend warranties to three years and require repair availability to improve durability and repair rates. Transport Policy (UK): London’s robotaxi trials face calls to hand full oversight to TfL, as ministers control licensing for driverless testing. Maritime Risk (UN): UN chief Guterres warned renewed Red Sea attacks could trigger serious economic fallout beyond the region.

Forced-Labor Tariffs: The US rolled out new 10%–12.5% tariffs on imports from 60 partners, replacing expiring temporary levies and targeting goods tied to forced-labor claims. EU-Tech Trade Clash: Trump also launched a Section 301 probe into EU trade practices after EU fines on US tech firms, warning of possible tariffs in retaliation. Canada-US Friction: Ontario Premier Doug Ford said Trump’s Canada tariffs are raising costs and hurting jobs, as trade tensions also swirl around the Gordie Howe Bridge. Trade Deals: Canada and the UAE concluded a free-trade agreement, while Canada-Ecuador signed a deal amid criticism from civil groups. AI Policy Battle: Nvidia CEO Jensen Huang backed an open-letter push to keep open-weight AI models available, countering tighter restrictions. Connectivity Push (Canada): Canada announced $141m for high-speed internet in rural Saskatchewan, aiming to reach more than 30,000 households. Industrial Location Strategy (India): Karnataka’s CM said a new policy in 100 days will help firms set up beyond Bengaluru with cheaper office space. Ghana Economy Debate: Ato Forson’s mid-year budget review drew praise for macro gains, but critics warned structural problems remain. Pakistan Health & Exports: DRAP’s used-device rules drew pushback from importers, while carpet exporters sought policy support to sustain global market share.

Forced-Labour Tariffs: The US is rolling out new 10%–12.5% duties on 60 trading partners under Section 301, replacing an expiring global levy and hitting major economies including China, India and the EU—prompting immediate pushback from Beijing and others. Trade-War Backlash: China says the tariff war “serves no one,” warning against escalation as Washington frames the move as forced-labour enforcement. UK Impact: Britain’s government argues it’s “in a better place” even as fresh Trump tariffs return, underscoring how quickly trade rules can shift. EU-China Tension: The EU flags its large trade gap with China as “unsustainable,” while policymakers watch how tariffs and industrial policy collide. Regional Deals: Canada and Ecuador sign a free trade deal in Ottawa, despite civil-society warnings about environmental and human-rights risks. Energy & Growth: Ghana advances gas processing and a gas-fired power plant in its mid-year budget, while South Africa seeks private capital to tackle its water crisis. Digital Government: Ajman renews trade licences using agentic AI in a headless, automated government service—an early signal of how commerce admin may modernize.

Trade & Tariffs: The U.S. is set to announce what happens as Trump’s 10% global duty expires, with officials saying any new levies will follow legal steps rather than a fixed timetable. Canada-U.S. Negotiations: Prime Minister Mark Carney told premiers Canada is “stronger” amid tariff threats, arguing unity is the best negotiating tool as leaders press Ottawa’s plan. AI Governance: Elon Musk urged peer review by rival AI labs before frontier models ship, with government stepping in only as a last resort; Canada meanwhile is consulting on AI transparency to help businesses and consumers understand AI interactions. Digital Economy & IP: Malaysia launched a Creative Economy Data Model to measure the sector’s GDP and jobs impact, while APEC ministers backed a joint digital and AI agenda focused on connectivity, skills, trust, and open investment. Energy & Investment: Saudi Arabia signed a peaceful nuclear cooperation framework with the U.S., aiming to build long-term energy security; Ghana is finalizing a $500m World Bank oil palm financing deal. Public Finance: Ghana’s mid-year review defended spending against underspending claims, detailing payments across wages, debt service, health, education, and infrastructure.