Temporary Truce Drives Short-Term Export Rebound

Import Growth Remains Modest as Domestic Demand Lags

Manufacturing Weakness Undermines Export Momentum

Beijing’s Strategic Focus: Domestic Demand and Self-Reliance

Trade Surplus Grows, But Below Historical Average

Truce Offers Breathing Room, Not Resolution

Source: Reuters

After Russia launched its full-scale invasion of Ukraine almost four years ago, neighboring Estonia quickly ramped up defense spending. Next year, it's expected to be the highest in the European Union relative to the size of its economy, at over 5% of gross domestic product. But the Baltic state doesn't just stand out for its procurement of military equipment, it's also making its mark when it comes to manufacturing.

The war prompted Estonia to build up a defense industry that was pretty much non-existent. Companies weren't allowed to manufacture weapons until 2018. Now, the country of 1.3 million people is nurturing a growing ecosystem of local defense startups, as my colleague Ott Tammik reports. With governments across Europe beefing up their military budgets, the hope is that Estonian companies will start to attract foreign customers.

The sector has grown quickly. There are almost 200 companies in the Estonian Defence and Aerospace Industry Association, including drone maker Threod and unmanned vehicle producer Milrem. Some were founded by Ukrainians or use the war to test out products. The government in Tallinn said early this year it would set aside €100 million to start one of Europe's first funds explicitly focused on investing in weapons.

Estonia's tiny size and the fact that it's so new to the industry, however, pose challenges. European governments typically purchase weapons from US manufacturers or their own domestic defense giants. Despite broad public support for bulking up Estonia's military, some of the efforts have also run into red tape and community resistance. The concern is that legal and bureaucratic obstacles to arms production could slow things down at a critical moment.

But the numbers are stacking up. Sales by Estonian defense companies doubled between 2022 and 2024 to €500 million ($582 million), the most recent data available. The government spent a similar sum on investment in the industry last year. And when it comes to demand for weapons and equipment, the trajectory is definitely upward.

Poland: OpenAI agreed to buy Neptune, a Warsaw-based startup that makes tools for analyzing different versions of artificial intelligence models. The ChatGPT developer has been using Neptune's products for more than a year and now plans to keep them exclusively for its own use.

Bulgaria: Tens of thousands of people protested against the government's tax and spending plans in the biggest show of dissent for more than a decade. After a group clashed with police, the minority administration withdrew its budget to revise it. Prime Minister Rosen Zhelyazkov refused to resign, saying the Balkan country needs stable leadership as it prepares to join the euro on Jan. 1. A no-confidence vote may take place next week.

Ukraine: The EU proposed two options to cover Ukraine's financial needs, suggesting either a loan backed by frozen Russian assets or one backed by the bloc's own budget. Meanwhile, Vladimir Putin held "very useful" talks with US envoys, though they failed to reach agreement on a plan to end his war.

Hungary: Prime Minister Viktor Orban said he's ready to throw a financial lifeline to Budapest, where the opposition leadership blames the government's tax policies for pushing the capital city to the brink of insolvency.

Poland: The country should prioritize cheaper onshore wind energy over offshore projects to stay competitive in the global economy, according to the head of the power grid operator.

As we head deeper into winter, people might be thinking of where to go skiing. Appetite to hit the slopes has been great for Polish ski-lift operator PKL. Now the state-controlled company is looking at going public, with an IPO possibly in the first quarter of next year, people familiar with the plans said.

As the US pushed to impose its peace plan on Ukraine, Europe was getting a glimpse of what NATO's eastern frontier might look like should the Americans disengage. The lush, mountainous region of Transylvania in Romania showcased how the continent might be defended with less US involvement should Russian troops cross into NATO territory. The brigade of soldiers participating in the exercise was all from Europe and commanded by the French. Indeed, NATO's deterrence on its eastern flank needs to be increased, not decreased, Romania's foreign minister told Bloomberg in an interview.

Source: Bloomberg Europe

The Reserve Bank of India (RBI) cut its key repo rate by 25 basis points on Friday and took steps to boost banking-sector liquidity by up to US$16 billion (RM65.8 billion) to support a "goldilocks economy".

The six-member monetary policy committee voted unanimously to lower the repo rate to 5.25%, in line with a consensus view, and maintained a "neutral" stance, suggesting room for further rate cuts.

The central bank has now cut rates by a total of 125 basis points since February 2025. It held rates in August and October.

The Indian economy is facing a "rare goldilocks" period, RBI Governor Sanjay Malhotra said in a video address.

Since October, India's economy has experienced rapid disinflation leading to a breach of the central bank's lower threshold of tolerance, said Malhotra, adding that growth has remained strong.

Given these macroeconomic conditions, "policy space" exists to support growth, he added.

The RBI also decided to conduct open market operations of one trillion rupees (US$11.14 billion or RM46 billion) to buy bonds this month, and another US$5 billion in forex swaps to add liquidity to the banking system and speed up transmission of lower rates.

India's benchmark 10-year bond yield dropped nearly five basis points to 6.4581% after the central bank's moves. The rupee fell 0.1% to 89.87, while the benchmark equity indexes were up 0.1% each.

Stronger growth; lower inflation

The central bank raised its GDP forecast for the current year to 7.3% from its previous estimate of 6.8% while the inflation projection was lowered to 2% versus 2.6% in October.

The South Asian economy expanded at a sharper-than-expected clip of 8.2% in the July-September quarter but growth is expected to slow as the full impact of up to 50% tariffs imposed by the US hit exports and sectors from textiles to chemicals.

External uncertainties could pose "downside risks" to growth, Malhotra said.

On the other hand, retail inflation stood at an all-time low of 0.25% in October and is expected to remain soft in coming months. The central bank targets inflation at 4%, within a tolerance band of 2% on either side.

"Underlying inflation pressures are even lower," Malhotra said, pointing to a "generalised" decline in price pressures.

Source: Theedgemarkets

RBI Cuts Rates as Growth Risks Overshadow Inflation Relief

Industrial Output and Manufacturing Show Signs of Deceleration

Tariffs and Trade Uncertainty Cloud Export Outlook

Currency Weakness Adds Another Layer of Economic Risk

Rate Cut Aims to Cushion Growth as Trade and Industrial Strains Mount

Source: CNBC

Russia is lining up a naval base on the Red Sea. US President Donald Trump seeks peace in the Democratic Republic of the Congo while threatening war in Nigeria. Extremists are on the march from the Sahel to southern Africa. Across the continent, foreign powers are scrambling for vital resources and real estate.

Africa may not get as many headlines as other regions. But it's where many of the most important trends of the modern era come together — and it's a preview of just how ferociously messy a multipolar future might be.

For years, Africa was a strategic backwater. In 2000, the Economist famously called a region mired in debt and underdevelopment the "hopeless continent." But now, Africa looms larger on the geopolitical scene.

The global map of economic opportunity has shifted, as better infrastructure — physical and digital — has helped connect a fragmented continent, while Indian Ocean ports provide links to lucrative markets in Asia and the Middle East. In recent years, several of the world's fastest-growing economies have been found in Africa. The continent's middle class could exceed 1.1 billion people by 2060.

Africa is central to the world's energy future, thanks to prodigious oil and gas reserves as well as generous deposits of materials — cobalt, manganese, copper — that are critical to renewables. It is a demographic powerhouse in a graying global system: The continent may account for half of all births by century's end.

Africa certainly isn't hopeless, these days. But it is still marked by some uglier trends.

As the global incidence of war rises, Africa is awash in conflict — whether the vicious civil wars that have recently consumed Sudan and Ethiopia, or multisided, cross-border struggles like those that have ravaged Congo for decades. The continent has arguably displaced the Middle East as the epicenter of violent extremism: Terrorist groups torment governments and societies from Mali to Mozambique.

Bloody instability has led to democratic backsliding: The recent coup in Guinea-Bissau makes 10 military takeovers since 2020. Most of all, this mix of opportunity and volatility has made Africa a showcase for the many layers of rivalry that convulse the global system today.

The great revisionist states, Russia and China, see Africa as a place to enhance their influence while weakening America's. Russia does so by using arms and mercenaries to intervene in conflicts and coups from Niger to the Central African Republic. China uses trade, debt and infrastructure projects to entrench its economic and diplomatic influence. Africa's wars provide a "test lab," remarked one former Chinese officer, where Beijing can deploy peacekeepers and hone a superpower's strengths.

Yet middle powers and micro-powers are also reaching for glory.

Middle Eastern players — Qatar, the United Arab Emirates, Saudi Arabia, Iran, Turkey — have exported their rivalries into North Africa and the Horn, which they view as African extensions of their own regional neighborhood. India considers East Africa the western edge of its geopolitical domain and a vital flank that must be held against China. Former colonial powers and advanced democracies seek African routes to resilience for critical mineral-supply chains.

If you want a sense of how complex and contested the African geopolitical environment is, look at Djibouti. That small country is positively littered with foreign military bases, because it sits at the strategic nexus of the Gulf of Aden and the Red Sea.

African states aren't mere bystanders: The continent's internal geopolitics have become fiercely competitive. Regional potentates — Ethiopia, Kenya, South Africa, Nigeria — all seek primacy in their corners of the continent. Rwanda, once a failed state wracked by genocide, now projects power across Central Africa and the Great Lakes region.

Unfortunately, this mishmash of competing interests usually exacerbates Africa's miseries. Rivalry between South Africa and Rwanda has long fueled war in Congo. A dizzying array of outside actors have pumped arms and money into Sudan's brutal civil war.

Meanwhile, the US has often been lagging. For decades, it viewed Africa mostly through the lens of counterterrorism. It combined groundbreaking anti-AIDS initiatives that saved millions with disappointing development projects and military interventions — like the one that toppled Libya's Moammar Al Qaddafi in 2011 — that sometimes went catastrophically awry.

Trade and infrastructure initiatives typically failed to keep pace with Chinese influence. The Lobito Corridor, which promises to link the Angolan coast to Congo's huge mining deposits, is promising. But when Vice President Kamala Harris visited Zambia in 2023, to show America's commitment to the continent, she landed at a Chinese-financed airport and traveled on Chinese-built bridges and roads.

Donald Trump's Africa policy will, characteristically, help in some ways and hurt in others. Trump has rightly focused on securing critical minerals amid intensifying economic rivalry with China. He has sought, with mixed success, to end wars in Congo and other conflict zones.

Yet Trump's crackdown on foreign aid may cost African lives and American soft power. His tariffs have hammered developing economies that desperately need foreign markets. His threats to intervene militarily in Nigeria, to save its traumatized Christian population, blindsided the government there.

The better approach would be to tone down the theatrics, roll back the tariffs and stop letting the bad parts of Trump's policy impede the good ones. It would also involve recognizing that a world in which Africa remains a bottom-tier priority for US statecraft is one in which American influence there will continue to decline.

Whatever he does, Trump won't find Africa an easy place to navigate. But he won't have the luxury of treating it as an afterthought. There, dynamism competes with disaster; multiplayer struggles intensify local conflicts. Africa's global salience is growing, not least because of the viciously competitive era that is coming into view.

Brands is also a senior fellow at the American Enterprise Institute, the co-author of Danger Zone: The Coming Conflict with China, and a senior adviser to Macro Advisory Partners.

Source: Bloomberg Europe

Australia Breaks Export Records Amid Strong U.S. Demand

China, Japan, and Korea Amplify Global Demand Momentum

Tariff Policy, Supply Chains, and Political Signals

Strong Fundamentals into 2026

Source: Bloomberg