AGP Executive Report

Energy Shock Watch: The OECD warns the Middle East conflict could push global growth down to 2.1% in 2026 (and 1.8% in 2027) if Strait of Hormuz disruptions drag on, lifting oil, gas and fertilizer prices and squeezing confidence. Global Outlook: The IEA adds that emergency oil buffers are running low and warns the world could hit a “red zone” if Hormuz isn’t fully reopened by late June/July/August. Monetary Policy: India’s RBI kept the repo rate at 5.25%, signaling caution as inflation risks and global uncertainty persist. Trade & Tariffs: The USTR proposes forced-labour tariffs on 60 economies, with Singapore facing a potential 12.5% hit; comments run until July 6. US Politics & Economy: Treasury Secretary Scott Bessent defended Trump’s agenda in a heated House hearing, arguing tax and deregulation are boosting working Americans. Local Growth Pressure: Johannesburg business leaders warn the city’s governance and financial crisis is a “national economic emergency,” demanding urgent reforms. Skills for Jobs: Malaysia kicked off TVET Day 2026, pitching vocational training as a competitiveness engine. AI & Creator Economy: YouTube’s AI remix push raises new questions about control and rights in the creator economy.

Middle East Energy Shock: OECD warns the Iran conflict is now the dominant force shaping the global outlook, lifting inflation and risking deeper slowdowns if Strait of Hormuz disruptions drag into 2027. Global Growth Watch: Fitch cut its 2026 global growth forecast to 2.4%, blaming higher oil prices for inflation pressure and weaker demand, even as AI investment props up parts of trade. U.S. Inflation Risk Shift: UCLA Anderson says the oil shock has replaced tariffs as the top U.S. risk for 2026, with inflation peaking near 4.5% and unemployment rising only modestly. Europe’s Trade-Off: OECD projects euro-area growth at 0.8% in 2026 while inflation edges above target again, forcing tougher ECB choices. Russia Investment Freeze: Russia saw its biggest capital investment drop in 16 years, with analysts citing an “investment pause” amid tight policy and shrinking corporate revenues. Local Circular Economy Push (India): Navi Mumbai unveils a “Recycle Hub” roadmap for POP idol and textile waste recovery, while MMR environmental groups back blue-carbon credits to monetize mangroves and wetlands. Policy & Trade Moves: Hong Kong and Uzbekistan agree a 30-day mutual visa-free deal to boost travel and trade links. U.S. Labor Share Concern: A new report highlights labor’s lowest share of output since 1947, even as productivity rises.

Australia GDP watch: Australia’s economy grew just 0.3% in the March quarter, renewing worries about a productivity recession as markets weigh what the RBA will do next and how inflation and demand are shifting. US policy & markets: Investors also track the Fed’s next steps and Senate Finance testimony from Treasury Secretary Scott Bessent, where tariffs and tax cuts are front and center. Global growth outlook: The OECD warns global growth is slowing, with Iran-war energy risks adding downside pressure. Trade & tariffs: The US is proposing forced-labor tariffs covering 60 economies, raising new supply-chain and cost questions. Middle East energy resilience: The IMF says Saudi Arabia is resilient thanks to rerouting oil via the East-West pipeline and Red Sea ports, even as the war disrupts momentum. Blue economy push: US lawmakers held a hearing on advancing fisheries and coastal economies, while Papua is betting on downstream fisheries and processing to raise coastal incomes. EU upgrade for Greece: The European Commission removed Greece from its macroeconomic imbalance list, signaling progress after years of surveillance. Housing finance: Wisconsin WHEDA approved $47.5m in housing tax credits to support 2,100+ affordable units. Armenia trade support: Armenia plans to reimburse customs duties for greenhouse exports to the EU, as greenhouse owners push back over market access.

Geopolitics & Energy Shock: Ukrainian drones hit Russia’s St. Petersburg oil terminal as Putin’s SPIEF forum opens, with fires, airport disruptions, and mobile internet outages—another reminder that war risk is now directly pricing into energy and logistics. Global Growth Watch: The OECD cut its global growth outlook to 2.8% for 2026, warning the U.S.-Iran conflict could keep energy and shipping disruptions elevated. Canada Macro: After a technical recession, the OECD expects Canada’s GDP growth to strengthen to 1.2% by end-2026 and 1.7% in 2027, supported by consumption, defence/infrastructure spending, and energy exports. Trade Policy: The U.S. proposed tariffs up to 12.5% on imports from 60 economies over forced-labour concerns, raising the stakes for exporters from India and others. Central Banking: Ghana’s central bank says inflation has fallen to about 3.4% and vows to sustain stability as rates ease. Local Economic Development: Kentucky lawmakers approved major agriculture funding and development board support; New York’s Knicks playoff run is projected to generate $202M in local economic activity.

US Tariffs on Forced Labor: The U.S. Trade Representative proposed new duties on imports from 60 economies, including India and Pakistan, citing failures to stop forced-labor goods; rates could reach 10% or 12.5% after a public comment process. Australia Growth Check: Australia’s March-quarter GDP rose just 0.3% (2.5% y/y), with cyclone disruptions hitting exports and net trade dragging growth, even as business investment jumped. South Africa Budget Focus: President Ramaphosa said tax revenue is improving and debt is stabilizing, while load reduction is ending—though global shocks could still slow job creation. Central Bank Watch: New Zealand’s Reserve Bank kept its OCR at 2.25% (with a more hawkish path implied), while India’s RBI is widely expected to hold rates in June but tighten later in FY27. Trade & Policy Signals: Pakistan pushed “smart taxation” to support rural nutrition and innovation, while South Africa debated migration rules as a growth and services pressure point. Business Moves: IndusInd Bank shares fell on a reported whistleblower complaint, and Felix Industries posted a sharp FY26 rebound tied to waste management and international contracts.

Labor Market Signals Caution: U.S. job openings jumped to 7.6M in April, but hiring stayed in “slow-hire, slow-fire” mode as Iran-war uncertainty and higher oil prices weigh on demand. Household Credit Relief: In New Zealand, lower interest rates helped push mortgage arrears down to 1.29%, though personal-loan hardship is rising and liquidations are climbing. Canada’s Growth Debate: Prime Minister Mark Carney said Canada’s “technical recession” is part of a “settling-in” phase as trade and investment shifts take hold, while opposition pushes back. AI Funding and Jobs Talk: Alphabet is raising $80B to fund AI infrastructure, and Nvidia’s Jensen Huang argued AI won’t cut jobs—sparking more software hiring. Trade and Digital Deals: The Philippines is set to boost its digital economy via a regional digital pact, while Armenia and the EU discussed ways to expand trade under their partnership. Policy and Tariffs: Japan may cut the food consumption tax to 1%, and Trump is easing tariffs on some steel, aluminum and copper inputs. Climate as Economics: Zimbabwe’s push for “green governance” links climate finance and energy transition to development planning.

IMF Rescue Update (Sri Lanka): The IMF completed its Fifth and Sixth Reviews under Sri Lanka’s EFF, unlocking $695M in cash support and lifting total IMF funding since the 2022 default to $2.4B, though officials warn the economy is “stable, but not out of danger.” Financial Inclusion Gap (Iraq): Exchange and money-transfer offices are expanding as about 87% of Iraq’s money supply remains outside the banking system, keeping cash transactions dominant even as inclusion rises above 40% in 2025. Trade Talks Watch (India–US): India’s Section 301 concern is simple: a deal may cut tariffs today, but new US investigations could reimpose them tomorrow, making the talks in New Delhi a test of tariff protection. Market Signals (India): Indian stocks opened mixed with IT leading; Nifty slipped while tech strength stood out, as foreign selling and Middle East-driven inflation worries linger. Digital Economy (ASEAN): ASEAN wrapped negotiations on a Digital Economy Framework Agreement covering cross-border data flows, digital payments, online consumer protection, and AI/fintech rules. AI & IP (China): China’s new trade secret rules now explicitly protect data, algorithms, source code, and AI-related tech, tightening enforcement for remote work and digital collaboration. Household Pressure (Australia): Australia’s cost squeeze is pushing more households toward insolvency and “recession-like” behavior, while data-centre and fuel imports are dragging trade and growth. Companionship Economy (China): China’s “companionship economy” is growing fast, with paid services for social help and experiences valued at about $7.4B in 2025.

Middle East Trade Shock: Iran is pushing for a limited interim deal with the US to ease economic pressure and “buy time,” while both sides keep expectations low as Strait of Hormuz risks keep oil costs elevated. US Growth Pulse: US manufacturing expanded for a fifth straight month in May, with the ISM PMI at its highest since May 2022, though Iran war and tariffs are still showing up in survey comments. AI Jobs Debate: Apollo’s chief economist Torsten Sløk says there’s “zero evidence” AI is causing net job losses, pointing instead to hiring for AI, data centers, and energy. Central Bank Credibility: Former Fed Chair Jerome Powell warns the Fed is facing a political “stress test” that could erode trust and hurt the economy. Canada Recession Fight: Conservatives accuse PM Mark Carney of avoiding accountability after Canada’s economy contracted again, fueling a technical-recession debate. Africa Financing Shift: A report says private credit is overtaking equity as Africa’s preferred funding model as venture funding tightens. Nigeria Digital Payments: Nigeria’s central bank unveiled a Payments System Vision 2028 to deepen digital payments and inclusion. Ghana Investment Push: President Mahama pitched Ghana’s export-and-industry agenda at the Ghana-UK Investment Summit, highlighting the 24-Hour Economy initiative.

Nepal Tax Shift: PM Balendra Shah says VAT revenue on electricity use will fund power-grid upgrades, including transformers, transmission lines and substations, after criticism that the 5% VAT could slow electrification and green adoption. Nigeria Reform Gap: CPPE and NECA both argue reforms have stabilized the macro picture, but businesses and households still aren’t feeling the benefits—fuel subsidy removal and FX liberalization helped, yet inflation, energy costs and naira volatility are squeezing MSMEs. Trade Deal Momentum: India-Oman CEPA takes effect, granting duty-free access to 98.08% of Oman’s tariff lines and targeting sectors from engineering and pharma to processed foods and marine products. Geopolitics Hits Energy: Oil jumped more than 2% as Israel expands operations in Lebanon, while China’s crude imports reportedly slump amid Iran-war-driven supply and pricing shifts. Gig Economy Rules: The ILO is close to finalizing a first global convention to set core labor protections for platform workers. US-India Talks: A US delegation in India aims to finalize an interim trade pact under the broader India-US BTA. Local Business Pulse: Statistics Netherlands reports Q1 turnover in accommodation and food services rose 2.2%—the slowest growth in five years.

Geopolitics & Security: European officials say Russia is intensifying efforts to steal Western technology and defense secrets via shell companies, spies and hackers—raising risks for critical infrastructure. Crypto & Finance: A fresh push links Trump-era immigration and stablecoin policy to a Bitcoin-friendly “stablecoin economy,” while separate reporting warns stablecoins can function like private money and pose risks to the broader economy. Monetary Policy Watch: India’s RBI MPC (June 3-5) may hold rates as West Asia conflict lifts fuel/commodity costs, strains supply chains and pressures the rupee. Regional Trade & Growth: India-Oman CEPA starts June 1 with broad zero-duty access for labor-intensive exports; ASEAN officials say negotiations for the Digital Economy Framework Agreement are concluded, targeting a more seamless regional digital market. China Economy: China’s factory activity is flat (manufacturing PMI at 50.0) as weaker demand and higher energy costs weigh on orders. Business Impact (Nigeria): NECA says Tinubu’s reforms haven’t yet delivered broad benefits for MSMEs, with naira depreciation, inflation and energy costs still squeezing operations. Wages & Costs (US/Global): US wage claims collide with CPI inflation at 3.8% y/y, while India keeps EPFO’s ₹15,000 wage ceiling for now amid compliance concerns. Infrastructure Planning: South West Development Commission rail sessions stress becoming an “intelligent client” with financing and governance readiness before projects move forward.

ASEAN Digital Deal: ASEAN wrapped talks on the region’s first Digital Economy Framework Agreement (DEFA), clearing the way for signing in November and aiming to lift the bloc’s digital economy from a projected $1T by 2030 to as much as $2T. Budget Push (IT/EV): Nepal unveiled a budget package that boosts IT exports with tax exemptions and introduces an AI-enabled e-assessment system, while also reshaping electricity taxation. Energy Security Watch: Ghana’s fire service warned that safety lapses in the Kpone industrial enclave could trigger shortages affecting power generation and oil/gas supply. Cost-of-Living Pressure: In the U.S., gas prices above $4.50 a gallon are pushing consumers to cut “fun” spending and lean on free activities. Labor & Wages: Philippines exporters urged caution on another Metro Manila minimum wage hike, warning it could hit exporters and micro firms. Tech & Payments: Paytm’s founder said India’s digital payments and mobile economy still have room to expand, with AI seen as a growth “force multiplier.” EU-China Trade: EU leaders said their trade and investment relationship with China is becoming unsustainable, setting up tougher measures. Women’s Economic Rights: Pakistan faces weak enforcement of women’s economic rights, with low labor participation and barriers to credit, mobility, and childcare. India’s Resilience: India’s finance ministry pointed to “cautious resilience” amid West Asia-driven energy and logistics shocks, with stable domestic fundamentals but tougher global conditions.

Global Energy Shock Watch: IMF, World Bank, IEA and WTO warned the Middle East conflict is draining Strait of Hormuz oil inventories at a record pace, raising fuel and food risks and threatening Northern Hemisphere growth. Policy That Hits Households: A gas tax holiday is back in the U.S. debate, but economists in Ohio say the savings are too small versus the state budget hit. China Growth Cools: The Conference Board’s leading and coincident indexes both fell in April, pointing to weak demand and lingering external pressure; GDP growth is forecast around 4.5% in 2026. France Slips: France’s economy contracted 0.1% in Q1 as consumer spending and construction weakened, with recession risk flagged. CEO Confidence Drops: A survey found CEO confidence fell sharply amid the Iran war and softer consumer sentiment, raising the odds of slower hiring and spending. Local Growth & Tourism: Sports events in Hattiesburg and Panama City Beach are projected to pump millions into local economies. Business Update: India’s Mach Travel Solutions reported FY26 results as it shifted toward an integrated travel solutions platform. Africa & Asia Developments: Nigeria’s Tinubu said recovery is underway; Nepal budget moves toward green industry and higher excise duties on select goods.

Canada recession watch: StatCan says Canada’s real GDP stalled in Q1, with an annualized -0.1% after a revised Q4 drop—some economists call it “technical recession,” others say it may be revised and not yet a full downturn. EAEU pressure on Armenia: Russia-led Eurasian Economic Union leaders say they may suspend Armenia later this year over EU ambitions, urging a referendum and warning of “significant risks” to economic security. Brazil growth check: IBGE reports Brazil GDP up 1.1% in Q1 2026 vs Q4 2025 (1.8% year-on-year), led by agriculture and investment, while exports fell and imports rose. Middle East sanctions & energy costs: The US expands sanctions targeting Iran’s “shadow oil economy,” while Lesotho’s central bank hikes rates to protect reserves amid fuel-price and geopolitical shocks. Policy and business moves: Philippines-Japan sign an updated tax treaty to cut double-tax risk; South Korea sees a Utility Global-Samjin H2 collaboration; South Carolina updates incentives for redeveloping abandoned buildings. Local economy themes: A Kansas data center project faces pushback; Pakistan cuts petrol and diesel prices by Rs22 as Eid relief.

Philippines–Japan Trade & Industry: Marcos and Japan’s PM Takaichi pledged to upgrade the Luzon Economic Corridor into a “world-class” hub, prioritizing rail/ports, clean energy, semiconductors, digital links, agribusiness and civilian port upgrades. Africa Growth Outlook: The AfDB’s African Economic Outlook projects Africa growing 4.2% in 2026 (4.4% in 2025), with Nigeria seen at 4.1% growth in 2026 amid inflation and geopolitical strain. US Labor: Jobless claims rose to 215,000, but layoffs stay low, suggesting hiring remains cautious rather than collapsing. US–Iran Sanctions: The US expanded sanctions on Iran’s “shadow oil economy,” warning traders of risks and aiming to cut illicit revenue. Sri Lanka Reform Watch: The IMF said Sri Lanka’s EFF reviews unlock about $695m and strengthened resilience, but warns 2026 growth may slow to ~3% as conflict risks worsen. EAEU Tech Cooperation: Vietnam and the EAEU plan deeper AI cooperation tied to smart agriculture, cities and transport, with trade already at $8.3b (2025). South Africa Rates: The SARB lifted the repo rate 25 bps to 7%, with further moves dependent on Middle East/oil and inflation easing. Malaysia Islamic Finance: Malaysia retained top spot in the world Islamic economy ranking, citing its halal, finance and innovation ecosystem.

Consumer Mood vs Reality: U.S. consumer sentiment hit record lows in May as gasoline prices jumped, but economists note the drop may not yet show up in broader confidence measures—still, it raises risks of a “stagflation-lite” feel for spending. Corporate Caution: The Conference Board’s CEO confidence measure fell to 47 in Q2 as the Iran war and supply-route stress weighed on business outlooks, even as many firms plan to keep investing. Banking Watch: RBC reported Q2 profit up 25% and cut credit-loss provisions, but warned of a “period of volatility” tied to North America trade talks and the Middle East. Global Shock Radar: The World Economic Forum says global growth expectations have deteriorated sharply, with most economists expecting higher inflation if Strait of Hormuz disruptions persist. EU Finance Push: The E6 (France, Germany, Italy, Netherlands, Poland, Spain) urged the EU to speed up a capital markets union by summer 2026, including digital payments and a digital euro. IMF on Sri Lanka: After a $695m tranche, the IMF warned the Middle East war and cyclone damage tilt risks to the downside. Climate Costs in Germany: A study warns heat waves could cost Germany up to €112.5bn by 2030 via lower productivity and higher cooling and energy bills. Local Growth Projects: Philadelphia unveiled a nearly $30m plan to cut traffic around the Sports Complex, aiming to boost mobility and regional economic activity. Insurance & Jobs (Nepal): Nepal’s economic survey says life and non-life premiums reached NPR 160.2bn by February and industrial zones provided direct jobs to about 20,000 people.

Retail & Local Services Shock: Morrisons is closing 100 stores, with knock-on hits already showing up in places like Bewdley (McColls redundancy notice) and post-office access under pressure. Trade Policy & Industry Costs: Mexico’s economy minister warned that 50% U.S. tariffs on Mexican steel and aluminum are “unsustainable,” with USMCA review talks focusing on autos, metals, medical devices, labor, and critical minerals. Rates Watch: Economists are bracing for an expected rate hike, reading signals on inflation and the next moves. Energy/Inflation Spillovers: ECB chief economist Philip Lane said the Middle East energy shock could keep inflation elevated even after any quick war solution. Sanctions & Global Trade: A new look at Western sanctions on Russia’s fleet argues the “boomerang effects” are disrupting trade networks and feeding wider economic strain. Tourism-Led Growth: Cleveland County, Oklahoma opened a $1m mountain bike trail upgrade at Lake Thunderbird to boost visitors and jobs. Policy for Regional Development: Arkansas voters will decide Issue 3 to create economic development districts that can fund loans, grants, and infrastructure to spur local growth. AI & the Economy: OpenAI Foundation plans $250m to support research into AI’s economic impact, as AI and jobs remain a central debate. Business Confidence Signals: India’s leading economic index rose 1.5% in April, suggesting stronger near-term momentum.