AGP Executive Report

U.S. Growth: The economy expanded at a 3.4% annual rate in Q3, led by consumer spending and AI investment. But stubborn inflation and rising living costs are squeezing households, complicating the picture ahead of midterm elections. Europe: Eurozone growth slowed to 0.4%, from 0.6% in Q2. France’s economy shrank 0.1%, while Germany grew 0.2%; high energy costs remain a risk to businesses and consumers. Canada: GDP was flat in August for a second month, missing forecasts, and officials expect activity to weaken in September. Nigeria’s Borrowing Plan: President Bola Tinubu defended plans for billions in new foreign loans, arguing infrastructure investment can create jobs and help build a $1 trillion economy. Labour groups are questioning the need for more borrowing despite higher government revenue. Trade and Resilience: Philippine economic planning chief Arsenio Balisacan urged countries to strengthen trade and global partnerships rather than turn inward, while investing in infrastructure, skills and technology to weather uncertainty.

U.S. Growth: The economy expanded at a 3.4% annual rate in Q3, led by consumer spending and AI investment. But inflation and high fuel costs are squeezing households, leaving many unconvinced by the strong headline numbers. Europe: Eurozone growth slowed to 0.4%; Germany grew 0.2% as exports weakened, while France contracted 0.1% amid falling investment and poor trade performance. Higher oil prices are also raising the prospect of an ECB rate hike. Asia: Thailand’s economy improved in September as AI-linked electronics exports and data-center investment surged, though consumer spending and tourist arrivals fell. Business: Sri Lanka’s Softlogic Finance swung to a quarterly loss of Rs. 100.6 million, despite stronger lending income, as loan impairments rose and a one-off gain from last year did not recur. South Africa: A statistical rebasing puts the economy 5.3% larger than previously estimated. Fuel Costs: Kenya’s matatu operators warn that steep fuel prices are curbing travel and business activity, with likely fare increases adding pressure on consumers.

U.S. Growth: GDP expanded at a 3.4% annualized pace in the third quarter, led by consumer spending and AI investment. But inflation hit 3.6% year over year, the personal savings rate fell to 3.8%, and the Fed held rates steady, leaving markets alert to possible further tightening. Japan’s Consumers: Rising prices are pushing shoppers toward discount supermarkets and bulk purchases. Convenience-store customer numbers have fallen for 15 straight months, adding to concern about household demand as the Bank of Japan weighs a rate hike. Trade and Industry: Britain will require suppliers winning selected defence contracts worth more than £50 million to deliver UK jobs, investment or other economic benefits. Canada and the UAE also signed a trade pact expected to double bilateral trade to C$7 billion a year. Growth Outlook: India’s finance ministry estimates second-quarter growth at 7.35%, while Namibia’s projected 2.1% growth faces risks from livestock disease, fuel costs and a widening trade deficit.

Malaysia Growth: The government expects GDP growth to top 5% this year after a 5.3% expansion in the third quarter; growth is forecast at 4.2% to 5.2% in 2027. Eurozone Outlook: Business and consumer confidence fell to a four-month low in October, with the index slipping to 96.9. U.S. Consumers: Confidence rebounded in October, but more people expect job opportunities to shrink than expand, underscoring continued labor-market concerns. South Africa’s Economy: A statistical rebasing puts the economy 4.9% larger than previously estimated, at 6.99 trillion rand in 2022. State Enterprise Reform: Moldova plans to reorganize state-owned firms, put unused assets to work and raise productivity. Business Finance: Coast raised $35 million to expand its financial platform for industries such as construction, transport and energy. India Growth: The Finance Ministry estimates the economy grew 7.35% in the July–September quarter, supported by domestic demand and industrial activity.

Trade: Canada and the UAE signed a free trade agreement that will cut or eliminate tariffs on more than 99% of current Canadian exports once it takes effect in 2027; the deal builds on a UAE pledge to invest C$70 billion in Canada. Interest Rates: The Federal Reserve held its benchmark rate at 3.75%–4%, but two officials dissented in favor of a hike. Mortgage rates remain high: the average 30-year loan stood at 7.32%, while homebuilder confidence hit a 14-year low. Pakistan: The central bank chief says growth recovered to 3.7% in fiscal 2026, with the current-account deficit expected to stay below 1% of GDP, though inflation has ticked up. Iran: War and inflation are squeezing household budgets, with families cutting spending on food, housing and education. Treasury Secretary Scott Bessent says U.S. sanctions have sharply weakened Iran’s economy, a claim Tehran disputes. Digital Economy: Kazakhstan’s president is pressing for wider AI adoption across industry, agriculture and mining, while warning that technology investment must deliver practical economic gains.

Digital Growth: Malaysia’s digital economy is projected to reach $48 billion in gross merchandise value this year, up 20% and among Southeast Asia’s fastest-growing markets; nearly half of its AI use is enterprise-led, a new report says. Fed Watch: A poll of market professionals found 93% expect the Fed to hold rates steady this week, while 76% foresee a December hike as inflation pressures spread beyond energy. Jobs and Inflation: Iran’s labor ministry warns that up to 1.4 million people could leave the workforce if contraction continues. Official figures put September inflation at 89.8% year over year. Global Growth: China’s economy expanded 4.6% in the first three quarters of 2026, while Kazakhstan reported 4.2% growth over nine months, down from 6.5% for all of 2025. UK Higher Education: International students starting courses in 2024-25 are forecast to generate £45.1 billion in economic benefits against £4.7 billion in public costs, supporting about 287,300 full-time jobs.

Inflation: Economists raised 2027 inflation forecasts for 31 of 50 economies as oil stayed above $100 a barrel, warning that energy costs could keep prices high even as growth holds up. United States: Consumer confidence rebounded in October as gas prices eased, but remained under pressure from elevated costs. AI Investment: Anthropic’s potential $100 billion IPO adds to a wave of AI spending, prompting concern that companies are investing faster than they can demonstrate returns. United Kingdom: Two-thirds of Britons expect the economy to worsen, while 70% anticipate tax hikes ahead of the Budget. South Korea: The economy grew 1% in the third quarter, driven by chip exports, though domestic spending fell. Canada: Higher fuel costs and tariffs are expected to slow growth, with small-business forecasts pointing to a fourth-quarter dip.

South Korea: GDP grew 1% in the third quarter, more than triple the central bank’s forecast, as semiconductor exports surged. But consumer spending fell 0.2%, underscoring the uneven recovery. Sri Lanka: The cabinet approved a $100 million Asian Development Bank loan for a recovery program focused on resilience and inclusive economic opportunities, aligned with the country’s IMF-backed reform agenda. UK Business: More than half of surveyed business leaders fear Wednesday’s Budget will leave companies worse off. Confidence has been negative for seven straight quarters, with firms calling for tax and regulatory certainty. US Rates: Moody’s economist Mark Zandi urged the Federal Reserve to hold rates, warning that higher oil prices and other risks could threaten growth. Trade: China urged the EU to avoid broader import restrictions on Chinese goods and settle trade disputes through dialogue. Workers’ Pay: US workers’ share of national income fell to 52.8%, its lowest level in records dating to 1947, as gains increasingly flow to shareholders and capital owners.

South Korea’s Export Engine: The economy grew 1% in the third quarter, beating forecasts as AI demand lifted chip exports and investment. But household consumption slipped for the first time in nearly four years. Pakistan’s Borrowing Costs: Business groups warn a half-point rate increase to 12% will deter investment and hurt manufacturers already facing high energy costs. Separately, lawmakers were told tax exemptions and concessions cost Rs2.35 trillion in 2024–25, with a cost-benefit review due by June 2027. AI’s Growth Test: Goldman Sachs sees the boost to U.S. growth from AI investment nearing its peak, while Apollo’s chief economist says companies outside the tech sector have yet to see financial returns. New Zealand’s Fiscal Choices: Election tax plans differ, but the next government faces rising spending needs, weak productivity and hard choices over taxes, borrowing and public services.

Europe’s Fiscal Strain: Goldman raised its 2027 French deficit forecast to 5.4% of GDP, warning elections in France, Italy and Spain could widen deficits. France’s 10-year bond spread over Germany has reached its widest since the 2011 eurozone crisis. China’s Growth Mix: GDP grew 4.5% year over year in the third quarter, with exports surging, but weak investment and property-market troubles point to fragile domestic demand. U.S. Prices and Rates: The economy grew 2.2% in the second quarter, while September inflation climbed to 3.7% year over year. Cost-of-living pressures persist, and the Federal Reserve is expected to hold rates steady as markets weigh a possible December hike. War’s Economic Toll: Israel has spent more than $100 billion on wars, while lost output, rising debt and higher living costs weigh on growth and investment. Africa’s Value Chain: Tanzanian economists say processing more crops and minerals at home could create jobs and raise export earnings, supporting the country’s $1 trillion economy ambition.

Tariff Costs: Ottawa’s counter-tariffs on U.S. goods are adding an estimated $100 million a week to Canadian consumer costs and about 0.25% to prices, an economist told MPs. Brazil’s Direction: Luiz Inácio Lula da Silva won reelection with 51.7% of the vote, keeping Latin America’s largest economy under a leader who has resisted U.S. tariff pressure. Rates and Energy: Economists expect the Fed to hold rates this week, with a December increase widely anticipated. Brent crude has topped $117 a barrel, adding to inflation risks; Israel’s gasoline could exceed NIS 9 a liter when a temporary tax cut expires. Trade and Industry: South Korea posted the world’s second-largest current-account surplus among major economies in the second quarter, at $116.6 billion. AI Investment: With data-center spending surging, state and local election results may shape where facilities and energy infrastructure get built—and influence the next phase of U.S. growth.

Israel’s Sanctions Risk: The Bank of Israel rebuked Prime Minister Benjamin Netanyahu’s proposal to use cryptocurrency to bypass possible sanctions, saying the priority should be preserving trade and banking ties. Growth Under Pressure: Jordan’s economy grew 3% in the second quarter, beating forecasts, while Cambodia’s 2026 growth outlook was cut to 3.5% from 3.9% as weak tourism, fuel costs and climate risks weigh on activity. AI and Markets: U.S. experts warn that concentrated investment in AI stocks and data centers could leave markets exposed and push up costs for other sectors. UK Rates: City economists say markets are overestimating rate rises, arguing the Bank of England may cut rates next year if higher energy costs do not spread broadly through prices. South Korea’s Surplus: The country posted a $116.6 billion current-account surplus in the second quarter, second only to China among major economies.

U.S. Outlook: Inflation and earnings reports are in focus this week as consumer confidence weakens and the jobs market shows signs of strain. Monetary Policy: The Philippine central bank raised its key rate by half a point to 5.5% as inflation hit 7.2%, while economic growth slowed to 2.3%. Nigeria: President Bola Tinubu launched his re-election campaign amid a cost-of-living crisis. His subsidy and currency reforms have improved public finances and investor sentiment, but fuel prices and household hardship remain central election issues. Energy Shock: The IMF expects Gulf economies to contract 4.8% this year amid conflict and disrupted oil production; Saudi Arabia is forecast to shrink 3.3% before a possible rebound in 2027. Growth Risks: Namibia cut its 2026 growth forecast to 2.3%, citing weaker activity and risks from fuel costs and soft global demand. AI Investment: Apollo economist Torsten Slok warned that high computing costs and limited productivity gains are raising doubts about whether the AI boom can deliver returns to match its investment.

Cost of Living: Malaysia’s prime minister has launched a five-year action plan to tackle household pressures, warning that strong economic growth must translate into relief for families. India Outlook: The IMF raised its FY27 growth forecast to 7%, but cautioned that prolonged energy disruption, a weaker rupee and El Niño could threaten momentum. AI and Jobs: Barclays linked planned cuts of about 5,000 jobs to technology investment even as quarterly profits rose 12%; analysts estimate AI could eliminate up to 400,000 jobs at European banks by 2030. Regional Growth: South Africa says its special economic zones have secured more than R548 billion in investment commitments, with over 60,000 jobs projected once projects are operating. Rural Economy: Outdoor recreation generated $2.2 billion for Vermont in 2024, nearly 5% of state GDP, supporting businesses and jobs beyond tourism hubs.

U.S. Economy: Consumer sentiment slipped to 48.0 in October, near a record low, as inflation and fuel costs weigh on households ahead of midterms. A U.S. Chamber official said tariffs, immigration restrictions and the Iran conflict are adding to inflation and slowing growth. Global Outlook: The IMF sees world growth slowing to 3.1% in 2026 before recovering to 3.4% in 2027, with Middle East conflict disrupting trade and squeezing Gulf economies. Business Resilience: Scottish business owners are being urged to protect cash reserves and track cash flow closely as economic shocks pressure margins. Northern B.C. Housing: Home sales remained relatively steady in the third quarter, with the local economy recovering alongside stronger employment in the North Coast and Cariboo.

Brazil Auto Shift: Chinese automakers are moving from exports to local production, as shipments of their electric vehicles to Brazil surged 159% in the first eight months of 2026. U.S. Innovation: Massachusetts is directing new public and federal funding to quantum computing, biotech and microelectronics, aiming to boost research, domestic manufacturing and high-skilled jobs. Nigeria Cost Relief: The National Economic Council approved a 90-day plan focused on food affordability, tax harmonisation, investment barriers and household support. Trade Routes: China-Europe freight train trips via the eastern corridor reached 6,024 this year, up 40.3% from a year earlier. China Growth: Guangdong’s economy expanded 4.6% in the first three quarters, led by industry, finance and information services. Regional Risks: The IMF projects a 1.3% contraction across the Middle East, North Africa and Pakistan, while forecasting a Gulf recovery in 2027. Consumer Costs: AI-driven demand is tightening memory-chip supplies, raising pressure on smartphone prices and digital access in the Philippines.