The Decisive | Season 4 Ep.16 -The Age of Agility: Key Themes for 2026

View Full Transcript

Kristen Hallam: 

You're listening to the Decisive podcast, Insights and Analysis to empower confident decision making. 

 

Natznet Tesfay: 

My name is Natznet Tesfay and I lead the analysis team within Global Insights, and I'm thrilled to moderate today's discussion on what's coming in 2026. I have the pleasure of hosting a panel of our experts from across the team, including Ken Wattret, Vice President of Global Economics; Aries Poon, Head of Asia Pacific and Latin America Insights and Analysis; and Carla Selman, Head of Latin America country risk. We saw 2025 as a year of systemic shifts, and we look forward to 2026 as a year of recalibration to the aftershocks and new disruptions that we expect across the trading flows, the macroeconomy, and the geopolitical landscape.  

Having said that, we do note that governments and countries are increasingly more confident and taking steps to prepare for and respond to these trade policy shifts to a delicate macro environment balancing emerging tailwinds with persistent headwinds and a strategic competition environment where there's increasing demarcation around spheres of influence and innovation. We see that this will be a global landscape that is increasingly molded by actors who are agile and can adeptly navigate three core areas over the course of 2026, and those are: adapting to new trade realities, the shaky economic foundations and shifting asymmetries in geopolitical power.  

The panel discussion today will unpack aspects of each of these themes which we think are critical for you as you seek to convert risks into opportunities in a world where change is pretty much the only constant. So without further ado, I'd like to draw in my colleagues who are on the panel discussion today to start to explore each of these themes one by one. And I think, Ken, just to start with you, considering we are looking at the number of disruptions and how they've trickled through and created ripple effects across the macro environment. As we enter 2026, do we still see traditional anchors adrift? 

 

Ken Wattret: 

I think the circumstances going into 2026 are not that dissimilar to those going into 2025. There's lots of speculation about the possibility of recessions, including particularly in the US. We don't think we're headed to recessionary conditions, but we do accept that there are ongoing uncertainties over various issues and they're likely to continue to hinder economic growth both globally and across most major economies and regions. The focus this year has obviously been on trade-related uncertainties. Thankfully, the extreme rise in trade policy uncertainty that we saw back in April and the knock-on impacts on financial markets didn't last very long, but there's still a lot of lingering uncertainty in that area. The legal status of the IEEPA tariffs, for example, the penal tariffs on some of the US key trading partners, uncertainty over how framework trade deals progress, and so on. It's also important that we highlight that the uncertainty is not confined to trade. As you alluded to in the question. We've been highlighting for a long time now that many of the economic and financial anchors that we became accustomed to have become more uncertain and unstable. Think of the uncertainty surrounding the prospects for inflation, central bank policy, the levels of bond yields, fiscal issues and so on. 

They've all contributed to a challenging environment for growth in the recent past, and we forecast similar kind of environment going into 2026. On the positive side, and there are some positives, there are a few tailwinds which we think will help to support economic growth next year. They include moderations in inflation and extensions of central bank easing cycles. Although again, we need to be a little cautious about the potential impact of lower central bank policy rates on growth for a few reasons. Number one, the propensity for households to consume and for businesses to invest is likely to be dampened by the ongoing high levels of uncertainty. Number two, yield curves we think will probably continue to steepen given the poor state of the public finances in most of the world's major economies. So that will limit the pass through of lower short-term interest rates into borrowing costs for households and businesses.  

And fair, the scope for rate cuts varies considerably across economies. We see quite a lot of room for central banks that have been running defensive monetary policies this year to cut rates next year in the likes of Brazil, Turkey and Russia, for example. But those economies also face significant challenges. And in many other economies policy rates have already come down a lot and that limits the room for how much further they can fall. US situation's particularly interesting in that respect. Financial markets have been pricing in a very rapid fall to the estimated neutral level of U.S. policy rates by around the middle of next year. We do forecast that rates will go back to neutral in the U.S., but we think that's coming a bit later on. 

And that's because of lingering concerns about tariff induced goods price pressures in the us. So lots of uncertainty is basically the story again. 

 

Natznet Tesfay: 

Thank you for that, Ken. As you noted throughout a number of the areas where we've seen disruption and pressure, one area was tighter financing conditions. So as we look to the next year, what are the issues that you're monitoring closely as sources of potential financial stress? 

 

Ken Wattret: 

Keeping a close eye on lots of different risks because they can make a material change to the economic outlook. We particularly look at financial stresses because historically they've been one of the key causes of recessions. And that's not our base case, as I mentioned, but we still need to monitor the potential factors that could lead to recessionary outcomes. And one of the issues getting a lot of attention recently is the risk of a major correction in equity markets, particularly in tech stocks, where some valuations have been looking rather stretched. That's a particularly important issue for the US, first, because of the concentration of highly valued tech stocks in US markets. And second, because the US household sector is typically more susceptible to negative wealth effects should equity prices decline. Now that's not to say that a drop in equity prices would just be an issue for the US economy. The effects would be felt globally, including various transmission channels. 

We could trade confidence effects, financial market volatility and so on. Another area of long-standing concern for us is the parlous state of the public finances in many large economies. The good news is that if we're right and inflation comes down next year, and central bank rates generally come down or remain quite low as a consequence, then that takes away some of the near-term risk. But there are underlying vulnerabilities in the public finances which we think will persist over the long run. And we tend to characterize that situation as an unstable kind of cocktail of various problems. One, persistent high levels budget deficits, two, already very elevated debt burdens, three, political impediments to delivering effective fiscal adjustments and fourth, which is a long run theme, less favorable relative nominal growth and nominal interest rate dynamics. That makes stabilizing debt to GDP ratios increasingly difficult. And then regarding other potential risks, we saw back in April that an escalation of trade tensions, a major one, is a big issue for global financial markets. And we also saw a few weeks ago that problems could surface from some of the less transparent areas, less well regulated areas of lending, for example, through private markets. And that has the potential for some contagion onto the banking system. So there are lots of potential risks to keep an eye on. 

 

Natznet Tesfay: 

I'm going to pick up a thread there that you left up on and it's the volatility in the trade environment and that's certainly front of mind for many of our clients. So Aries, if I could draw you in here. Ken started off by flagging that we are going to see some of the same going into 2026 with an evolution across a few areas. As we think about 2026 from a trade policy perspective, more of the same or is the dust going to settle a bit? 

 

Aries Poon: 

Thanks, Natza. I would argue dust is far from settling, yet, as Ken mentioned, the heightened volatility and uncertainty that we saw during the early part of 2025 is probably over. However, we do see there are several very key developments that would inject new layers of uncertainty to the global trade landscape. For one is the US midterm elections in November 2026. The second one is the renegotiation of the USMCA, which is the United States Mexico Canada agreement, because that actually speaks a lot to the reshoring patterns and also to trade patterns that involve the US and other trading partners. Also the other uncertainty would be the fluidity of the trade alliances and partnerships and effort of trade diversification between many of the economies, especially within Asia Pacific and also among emerging markets with some of the major markets. And at the same time we also expect there will be some shifts in the regulatory development, especially in the EU. For example, how is EU going to position is CBAM requirement, which is the compliance requirement on third parties when it comes to environmental conditions. 

So all these will be changing the trade landscape in 2026. However, I really want to say that the financial market reaction to all these different trade developments will likely be much less volatile in 2026 compared to earlier this year. There are two reasons. One, governments and companies over the past seven, eight months, they have been prepared, preparing for a range of scenarios from upside scenario and downside scenarios. And also they have mitigatory measures either in place or in progress so they know what is the range of what could happen. And there was not the condition of sentiment at the beginning of 2025. And at the same time the many companies and actually many governments, they have shown that they have had a better grip or better handle on how to engage with the US and other trade partners when it comes to try to diversify and try to maintain their strategic autonomy. 

 

Natznet Tesfay: 

Thank you for that, Aries. I'd like to unpack that slightly more and the phrase you used at the end there, strategic autonomy. So applying that to countries or companies or both, how are we seeing actors building what we consider to be adaptive resilience in this age of agility that we're looking forward to in 2026? 

 

Aries Poon: 

Thanks, Natza. So I think I can go with that question in two angles. Look at how trade is being redirected, which is one of the many ongoing measures for economies to recalibrate interdependence there are several motivations for this recalibration. It's not only just about mitigating the downside coming from the new tariff regimes, but it's also about seeking new growth areas. Because when these economies are recalibrating, that means they're seeing reduced trade volume with the U.S. while they cannot really completely replace that. But still they need to find new areas to plug together as much as they could. But ultimately it is all about countries trying to build and improve and maintain their strategic autonomy, which actually gives them the leverages, give them the economics to maintain or to choose how they would act which will be in the best of their national interest while the geopolitical tensions are evolving. 

Now we need to take a longer view because trade don't really change one or two years. They might be minor, but you really don't see the trend. But throughout the course of more than five or even 10 years, you can see trends up building. For example, for the EU is actually speak to the core of the EU trade strategy which is ongoing de-risking from relying on the US economy. And also it talks about how ASEAN is very closely integrated with the economy of mainland China, not only as a market for the export, but also for the sources for imports of certain equipment, other things as well. The second part about adaptive resilience is about how companies respond to pressure on supply chain. And we can see supply chain in fact is going to face still quite significant physical risk from multiple areas. 

One of those would be the conflict levels, say in the Middle East. The logistics companies, they have shown they're very resilient in adapting to this disruption despite the volatile shipping cost. At the same time, we also see there is a physical shortage of water in some of the key canals such as the Panama Canal as well, which could be one of the two main choke points for the supply chain as well. So by navigating trade patterns, changes and also navigating with these potential disruption of physical supply chain, we can see different economies or different companies are really trying to do all these two things to adapt to the changing trade environment. 

 

Natznet Tesfay: 

I'd like to bring in Carla here because looking at confrontation between major powers was another key area for our clients and thinking about if trade is one area that's been a fault line clearly over the past year, what are going to be the other fault lines that we're monitoring over the course of 2026. Carla? 

 

Carla Selman: 

Yes, thank you, Natza. Hello, everyone. As you mentioned, in this context of increased strategic competition between the US and China, there two other sectors that are taking prominence because they are increasingly seen as negotiating tools, and these are critical minerals and AI and tech. So first with critical minerals, we always talk about critical minerals, how important they are for energy transition. But it's more than that because they're also very important for components of AI and tech and for defense. So China controls the supply chain of lithium, copper and rare earths, which puts the US in a very highly dependent position and vulnerable to China's export controls. China has already imposed export controls on industrialized lithium products. They have threatened with imposing also controls on refined copper products and also for some rare earths. 

Although in the recent framework agreement, the new announcement for export controls on rare earth has been suspended. But still it shows the leverage that China has in this supply chain. So here I want to highlight also the role of Latin America because China imports a lot of its lithium and copper from Latin America, from Argentina, Chile, lithium, from Chile and Peru copper. And it also has significant investment in the sector in Latin America. So what we are likely to see, we are already seeing is that the US is trying to counter this influence. So during tariff negotiations, these countries are more likely to also give increased opportunities for U.S. firms and critical minerals. We are already seeing it in Argentina, for example, and also very likely seeing it in Brazil with rare earths. 

Although rare earths is a bit different because for rare earths, China does produce a lot of the rare earths. But Brazil has big reserves, approximately 23% of global reserves. But it's very early stages the industry. There are ongoing discussions with the US to accelerate rare earth development so that Brazil can become potentially a key supplier here. Also, Brazil will have to balance relations with the US and China because even though on one hand it can become China's main competitor, China is also its main market and its main trading partner. So it's like a line that here Brazil will have to move. 

And the second sector is AI and tech, which is also emerging as a national security asset, with countries seeing it as a way to expand global influence. So also we have seen export controls that have been imposed, particularly from the US and we are also seeing that countries will be increasingly focused on data sovereignty, so ensuring that all the digital infrastructure is under their own jurisdiction. And this comes also hand in hand with data protectionism. We're seeing in China, for example, the EU, how tighter data localization laws and limits to cross border data flows. Whereas in the US it's a bit freer flow of data with fewer restrictions. So all of these different approaches are also leading to a fragmentation of frameworks. For example, in the US with AI the focus is more sector by sector and it's focused on innovation. In the EU, there's a more comprehensive framework focused more on obligations and precautions. 

And China is more state centered with a focus on the export of its digital infrastructure. What will happen with the other countries? The other countries are likely to adopt and adjust those frameworks to their domestic realities. And here also the middle powers are likely to play a role. So for example, we have seen that Brazil and the UAE are already or discussing or implementing regulations that balance for example, the US approach towards innovation, but also state oversight. So following more like China's model. And they are also developing their own LLMs in local languages, which gives an indication that they are likely to seek to expand that into the regions. 

 

Natznet Tesfay: 

Thank you, Carla. I like how you've given us practical examples about how countries are using new technology as a way of recalibrating interdependence, reframing that Aries provided us as regards to what we're seeing in the trading sphere. You highlighted that countries are using new technologies to assert their accrued influence. How else are they using that new technology to assert their newfound influence and that growing influence over the course of the next year? 

 

Carla Selman: 

So new technology also playing a key role in conflict on how we are seeing the evolution of conflict. So with more affordable and accessible technology, this is also transforming conflict dynamics. So it's easier for states and even non-state actors now to have access to these technologies and to initiate and sustain conflicts in time. So one example here in Ukraine, which has been quite advanced in the use of UAVs, drones for example, using drone swarms, which are coordinated among them using artificial intelligence with minimum human oversight and also other technologies like drone-on-drone interceptors. So even though before, small drones were more to use to spot targets or to drop explosives, now they're also being used to intercept or destroy other drones in midair. Then on the other hand, we are likely to see that the governments will be less willing to engage in prolonged military hostilities because of supply chain vulnerabilities, which is likely to maintain the escalation of violence more limited in duration, unless they can guarantee that they have the capacity to restock weapon systems. 

 

Natznet Tesfay: 

I’ll come back to a central theme that we've seen over the course of this past year with regard to resilience of supply chains also affecting the conduct or the willingness to engage in conflict and as you said, the longevity. So if we look over the course of 2026, you've highlighted that this is affecting active theaters like Russia, Ukraine. Are there others that you would highlight for our audience? 

 

Carla Selman: 

Yes, I would like to mention first of all, Russia, Ukraine and our outlook for this conflict is that first of all we don't foresee any country achieving a decisive victory in the one-year outlook. Partly it's because what I just mentioned, Ukraine increasing its sophistication with UAVs, but Russia retains air superiority. But this means that it is more difficult for one party to beat the other one. So this extension of conflict that I was referring to, on the other hand, a full peace agreement is also very unlikely because both sides have requirements that are mutually exclusive, particularly when it comes to disputed or unexpected areas. And yeah, ceasefire also very difficult to enforce because it is likely to be broken by both sides. And also there is no consensus on who should oversee that ceasefire. So we're still seeing that its scenarios are protracted war of attrition as we have seen until now. Then the other big conflict, obviously in the Middle East, we are more likely to see another round of interstate war between Israel and Iran. 

That's more likely than a regional war. So the risk of a regional war has decreased slightly and partly because of Iran's reduced military capabilities and because it is now less likely to step into other regional conflicts like Gaza, Hezbollah, Houthi, which are more likely to remain localized. That's how we are seeing it now. However, obviously we're monitoring potential triggers for escalation. One of them is sustained policy to impede passage in the Strait of Hormuz or indicators that Iran is rebuilding military capabilities or, or that it's resuming its enrichment program or failing to reach a new deal with the U.S. Finally, also in Gaza, our baseline view is that the ceasefire will hold, but with some localized strikes that are likely to be tolerated. In the next year, the focus will be on the phase two of the ceasefire agreement which is ending hostilities. But this will depend very much on if they reach a post-war settlement. 

And some of the challenges here is that it's very unclear what are the terms of disarmament of Hamas and what are the terms of a new transitional, technocratic Palestinian administration.  

And the last conflict I want to refer to is the U.S.-Venezuela, because so the U.S. has deployed significant forces in the southern Caribbean and also now into the Pacific. And even though they present this naval deployment, anti-drug operations, the size of the deployment indicates that it's likely also to be aimed partly at destabilizing the Maduro government. How? By trying to create internal frictions, particularly within the military, because the Venezuelan military has supported and props up the Maduro governments, if they manage to generate divisions, that would be an indicator of weakening of the government. One indicator of escalation here will be if they do target military or political assets, that will be clearly with the intent of destabilizing. 

 

Natznet Tesfay: 

Thank you, Carla. You've given us an overview across a range, not comprehensive, but it's certainly some of the more active theaters that we're following. And I'd like to pull you in and get a sense of how emerging markets are likely to perform over the course of 2026. Considering this outlook for China and considering we've been pretty resilient over the course of this year, can we expect that going into 2026? 

 

Ken Wattret: 

Short answer is we think it's a mixed picture, really. One of the positives which I've already mentioned is that we are expecting interest rates in the US to come down. That should allow a continuation of local currency stability and extensions of central bank easing cycles in many emerging economies. Lower US Interest rates are also typically a positive for risk appetite and for capital inflows to emerging economies. Now, that being said, for some of the larger, more trade-sensitive economies, we're expecting somewhat weaker economic growth rates in 2026. And that's partly because of a specific factor. The economies that benefited most from the tariff front running this year are expected to feel the reversal of that effect most as we head into 2026. Now that includes several of the major economies in Asia Pacific, which along with the US are the engine of global growth typically. 

So for China, for example, we're expecting annual real GDP growth next year to fall short of the official 5% target. We're looking at a growth rate a little below four and a half percent. The authorities are also trying to achieve a rebalancing of growth away from net trade towards domestic demand.  

In India, we've got a few factors leaning down on growth. One is the very high tariffs imposed by the US on Indian goods exports. But cushioning that negative effect, we've got a reduction in the goods and services tax which was implemented in the autumn of this year. So we're expecting a slowdown in India, but it's a relatively moderate one.  

Elsewhere in the emerging economy space, we've got some significant slowdowns in some of the larger economies, including Brazil, again partly related to tariff and trade developments, in Russia, reflecting a range of factors including the expectation of lower oil prices and ongoing sanctions. 

But as a positive, we'd highlight that we're expecting growth outperformance in some of the smaller frontier markets. And that's because of their economic structure. They tend to be less sensitive to shifts in global trade, they're less integrated into global supply chains. So they should be benefiting more from what we expect to be a decline in inflation, decline in interest rates that will give a boost to household real incomes and consumer spending. So the outlook there looks a bit more positive. 

 

Natznet Tesfay: 

I appreciate that. That positive note. One of the underlying themes that we've seen driving the global economy, certainly debates and we have this discussion with clients on a recurring basis, has been what's the outlook for the US dollar, especially over the course of this year, given the exchange rate, but generally on a strategic level around de-dollarization? What's your view or what's our view going into 2026 in these two areas? 

 

Ken Wattret: 

We have a model-based forecast for the dollar on a trade-weighted basis and that incorporates a further, albeit relatively modest, depreciation. That's partly driven by the expectation that interest rate differentials will narrow and become less dollar-supportive. The decline in the dollar that we're predicting though is relatively modest for next year, about 2% on a broad effective basis. That's about half of the expected decline for 2025 and certainly a lot less than we saw in the early part of 2025. There are a few reasons for that. In part, it's because it's weakening from an already lower level. And it's partly because some of the panic over US policy shifts has subsided. Now, in terms of the main bilateral exchange rates against the dollar, the outlook varies there, reflecting differences in domestic economic and financial drivers. 

For the larger advanced economies, in general, we're expecting some gains against the dollar, again partly related to shifts in interest rate differentials. The outperformer, we think, will be the yen. That's due to divergent monetary policy in Japan and the US. For Western European currencies, particularly the euro and the pound, we think there is scope for appreciation, but it's going to be relatively limited given their continued domestic difficulties.  

On the subject of de-dollarization, we've seen a long standing downward trend in the share of global foreign exchange reserves being held in US dollars. We think that's probably going to continue. We've seen central banks showing an increased preference for holding gold. That's been one of the factors driving the soaring price of gold through most of this year so far. We've also seen some evidence of reduced foreign holdings of U.S. Treasuries in the countries that have been most impacted by higher US tariffs, including mainland China and Canada, though the net effect of that hasn't been that large because they've been offsetting increases in foreign holdings from other territories, including notably the UK. So in broad terms we're expecting a kind of continuation of what we've already had in 2025. 

 

Natznet Tesfay: 

Thank you for that, Cam. And certainly one that we're going to monitor closely as the financial landscape evolves with new payment systems, especially within BRICS and other trading blocks. Aries, if I could bring you in here, because dollar is used as a currency for settlement depends on what are the trade flows. So what are the trade corridors that we're anticipating? What do we think is critical to watch over the next year? 

 

Aries Poon: 

Thanks, Natza. I would pick three for the sake of discussion. First one is the USMCA cluster, second one is European Union and then the third one is the ASEAN. So for USMCA our baseline is to expect that there will be tighter rules of origin in the as the most likely outcome for the negotiation of the pact. And for EU, as I mentioned earlier, because one of the core of the EU trade policy is de-risking from the US economy. So we've seen that EU has been accelerating the work of either concluding new deals or pushing deals that has been already in progress. For example, I do see the EU, economically speaking, it's probably have very high incentive of assigning FTA with say the Gulf states, with Australia, with the Philippines. We've also seen that EU is has renewed its efforts to push for deal with the CPTPP as well. 

And for ASEAN, that's another bloc because of the current trade relations with the US and also with mainland China, this bloc actually is turning more inward in a sense of we see more local sourcing, local manufacturing, not only because there is an established manufacturing ecosystem where the cost is relatively low, not just among themselves but also for advanced economies. And also they have a growing middle class and also growing population. So there is a labor supply. There is also increase in the skill level of labor. At the same time the cost is lower and then they have a higher affluent middle class who are the consumers themselves. And we also see ASEAN has just admitted 11th member of Timor L'Este. All these three clusters would be main areas to watch when it comes to the evolution of the trade dynamics, globally speaking. 

 

Natznet Tesfay: 

Thank you, little Aries. Could you just briefly add on to that, what does this mean for our outlook for reshoring prospects? 

 

Aries Poon: 

We do see the profile for reshoring is slightly changed for some countries because of the element of transshipment in some of the trade deals with the U.S. However, we do see that it's actually continue to happen for many of the, for example, ASEAN countries and some of the Eastern European countries as well, because ultimately all the most of the companies, most of the countries they are, they were reshoring, they're relocating manufacturing capabilities to the lower cost area. It's not only just for the US market because they are also producing for say, ASEAN markets for India, for mainland China, for European markets, for Australian markets as well. And this is what the future of the reshoring is going to be about. It's not just for the US market, which is big in itself, but also there are other markets. And that is why, for example, we see Vietnam, Malaysia, they are not just going south because of the additional tariffs on transshipment placed on the countries. So I think that is the sort of the high-level view on the reshoring prospects. 

 

Natznet Tesfay: 

Thank you. That brings me back to your phrase global regionalization that you've explained to our group. I appreciate that. Carla. We see that there are some blocs in formation, expanding, some reinforcing, some withering away. A lot of this depends on what the domestic governments are able to do and the alliances are based on the strength of its weakest link. So what elections are you watching very closely over the course of the next year? 

 

Carla Selman: 

First of all, obviously the most relevant for tariffs, it will be the midterm elections in the U.S. We do think, however, that this is unlikely to significantly affect policy direction because in reality this depends largely on the president who has, as we have seen, used a lot of executive orders for his foreign policy. In the case of Democrats winning the House, which is a very plausible scenario that we are looking at, what we are likely to see is, for example, a slowdown of executive orders, or what they are likely to do is to oppose further tariffs or hold hearings on the higher cost that this is bringing. But there's not much that they can do considering that the US is becoming more reliant on tariffs as a revenue source. The Democrats, if they would win the House, for example, what they could do is force to lower military or intelligence spending or conduct investigations on President Trump's military activities and operations. And also it will be a signal obviously for the 2028 presidential elections what we can expect from them. 

 

Natznet Tesfay: 

There are many other votes across the other parts of the world. If you were just to highlight one or two other key polls that you're watching for 2026?  

 

Carla Selman: 

Yes, I will choose a couple. First of all, I'll refer to Brazil because Brazil is having presidential elections next year. So whoever wins the government, we think that Brazil will maintain its focus of autonomous foreign policy, of favoring global trade and preserving close ties with China, which is its main trading partner. If there is an opposition right wing candidate close to former President Bolsonaro, we still don't know who the candidates are going to be but if there's some a figure close to former President Bolsonaro they would likely promote closer ties with the US and would likely deprioritize the BRICS. But just to deprioritize, not completely move away or from the BRICs or from China, particularly because of the economic importance of China as a main trading partner. And also anyone trying to move away from China would face a lot of resistance from the business lobby, particularly the very influential agribusiness lobby that has China as its main market. 

And that happens across most of Latin America really because both the US and China are main trading partners for most of the countries, first and second, sometimes third, but two very important markets. So all the countries are balancing these relations with both US and China and they are unlikely to move away from China. And the other election I just want to briefly mention is Israel has legislative elections due by October 2026. So this is likely to also determine the approach that the country will take towards conflict. We do think that regardless of the result, what they will maintain is their close strategic relations with the US and also their policy towards Israel. What can change, particularly if there's a win for left wing or centrist parties, is probably more support for a Gaza ceasefire. 

 

Kristen Hallam: 

Thank you for listening to the Decisive podcast from S&P Global. Please subscribe and join us for next week's episode. Until then, stay curious and stay informed.