For several years, Central Europe has been facing a marked demographic decline. Its magnitude varies from one country to another. The total population decline from 2004 to 2025 ranges from -0.3% in Slovakia to -17.2% in Bulgaria. The Czech Republic is the only country in the region to have seen a population increase over the same period. The working-age population (ages 15–64) is also declining. However, the situation is less unfavourable in Hungary, Poland, the Czech Republic and Slovakia, while Romania and Bulgaria are experiencing a more significant decline due to migration patterns. Net migration flows were negative for Bulgaria until 2019 and for Romania until 2021. However, this trend has reversed in recent years
As in 2022, the energy shock will affect emerging and developing economies. Today, as in the past, this shock is a negative-sum game between importing and exporting countries. Furthermore, although this is basically a supply shock, central banks in emerging economies may tighten their policies if they need to counter downward pressure on exchange rates, in order to prevent inflation from rising too sharply. However, compared to 2022, there are mitigating factors: 1/ the absence of a shock to agricultural commodity prices so far; 2/ AI, which is an external growth driver for Asian countries in particular; and 3/ the Fed is expected to adopt a more accommodative stance than in 2022 in response to the anticipated rise in inflation
Equity indices, Currencies & commodities, and Bond markets.
Key indicators for emerging countries: Real GDP, inflation, credit, public debt.
With the rise of artificial intelligence (AI), emerging countries with strategic resources—such as critical metals and semiconductor production capacities—are becoming key players. Countries that are well positioned within AI supply chains benefit from both an economic growth engine and an asset to leverage in their international relations. Industrialised countries in Asia, which account for over 85% of the global export of electronic chips, are best placed to capitalise on the increasing demand for AI. However, this advantage comes with greater exposure to the risk of a technology market correction
When Donald Trump ran and won in 2024 on a campaign to “make America Great Again” by building a tariff wall around the US, very few voices rose to defend free trade, outside of international organisations whose creed it is to defend it. After “Liberation Day”, economic forecasters braced themselves for a global trade war. But nothing of the sort happened. Instead, 2025 ended up being an all-time record year for trade liberalisation measures. 2026 is not even two-month-old and has already seen several giga-trade deals signed, two of which by India, one of the countries with the highest tariffs in the world, and there are more signs that the tide is turning
Kevin Warsh is set to succeed Jerome Powell as Federal Reserve Chair in May 2026, pending Senate confirmation. President Donald Trump has picked a figure whose public and private track record is likely to reassure the financial markets. While Warsh has advocated lower rates and a reduction in the central bank's balance sheet, he will probably be constrained in his plans. Therefore, we do not expect any material shift in monetary policy in the short term.
On 2 February, President Trump announced the approval of a trade agreement with India, reducing "reciprocal" tariffs on Indian imports from 25% to 18% and eliminating the 25% "penalty" imposed on oil purchases from Russia. As a result, Indian goods will face lower tariffs than those from Southeast Asian countries (excluding Singapore), especially Vietnam and Thailand.While India has signed several trade agreements since last year (including a deal with the EU in January), these arrangements will mean it is no longer penalised compared to its Asian neighbours, both on the U.S. and European markets. However, the short- to medium-term impact on its growth will remain modest
According to estimates from the Institute for International Finance, net resident capital outflows from the Gulf reached USD 271 billion in 2025, while net non-resident capital inflows amounted to USD 228 billion. Since their 2022 peak, the oil prices and export revenues of the Gulf Cooperation Council (GCC) have been declining. However, the GCC has never before invested abroad as much, despite the drop in its current-account surplus. The surplus fell from 15.7% of GDP in 2022 to 8% in 2023, 5.9% in 2024 and 3.8% in 2025. At the same time, net resident capital outflows from the region rose by 10% (2023–2025).
The issue of European sovereignty has been on everyone's mind recently. Among its many dimensions, sovereignty in retail digital payments is often cited as an urgent gap to be filled. In fact, two-thirds of digital payments in the Eurozone rely on non-European providers, mainly American. However, this situation is not inevitable, and 2026 could well be the year when a European alternative takes off and reaches critical mass.
On 1st January 2026, Bulgaria became the 21st member of the Eurozone, nineteen years after joining the European Union. Since June 2025, Bulgaria has satisfied the EU's convergence criteria, which include price stability, sustainability of public debt, exchange rate stability and long-term interest rate stability. The European Parliament granted its approval in July 2025, and shortly thereafter, the rating agencies Fitch and S&P upgraded Bulgaria's sovereign rating from BBB to BBB+.
Most years fade into the background as soon as a new one starts. Not 2025: a year of epochal shifts, in which the macroeconomy was the dog that did not bark. What to expect in 2026? The shocks of 2025 will not be undone, but neither will they be repeated. Instead, their effects will work their way through the system, in ways that are unlikely to be linear and smooth. In the baseline scenario, the macroeconomy will remain a dog that does not bark, either out of alarm or joy. However, there are a few potential path changers to look out for. Chances are, then, that 2026 will not feel any smoother on a day-to-day basis than its predecessor. However, that will not mean good outcomes cannot be reached for those who keep their heads.
Private fixed investment in the United States is ‘K-shaped’. Investment in artificial intelligence has become a major driver of US growth, whereas non-AI adjacent components are contracting. However, AI investment is particularly import-intensive.
Countries will not be able to limit global warming to +1.5°C compared to pre-industrial levels, as was the ambition of the Paris Agreement ten years ago. However, it would be wrong to conclude that it was a failure. Paris was the catalyst in accelerating for the race to decarbonisation, not only in the European Union, but also in China, which is now on track to reduce its greenhouse gas emissions. Despite the climate scepticism of its president, Donald Trump, the United States continues to green its electricity production. The scientific consensus is that we must now expand and intensify our efforts, which will come at a cost, but much lower than the cost of the status quo.
