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By Ken Stibler, Noah Berman and Nojan Rostami. Executive editor: Dan Keeler

Africa

Algeria’s president casts doubt on his own election win

Algeria’s national election appeared to end the way many observers expected: President Abdelmadjid Tebboune was coasting to a second term with 95% of the low-turnout vote. 

As many analysts expected, Tebboune’s two challengers—who won a combined 5.4%—quickly moved to challenge the results, AFP reports. But by mid-week, Tebboune’s campaign had joined in the challenge, alleging “inaccuracies, contradictions, ambiguities and inconsistencies” in the election.

Experts are uncertain why Tebboune has challenged his own victory, AP reports, and most expect him to remain in power. Some argue that he is attempting to create legitimacy for his leadership after less than a quarter of voters participated in the election, with many abstaining in protest. Tebboune rose to power in 2019 after mass protests deposed his predecessor.

The decision for how to proceed now rests with Algeria’s constitutional court, which has until next week to rule on the election challenges.

Senegal’s president calls snap election for November

Newly elected Senegalese President Bassirou Diomaye Faye dissolved his country’s opposition-run parliament on Thursday, calling for snap elections in November that he hopes will create a parliamentary majority for his PASTEF party.

In a televised address, Faye said the opposition had become challenging to work with and that he needed a majority in the national assembly to “to bring about the systemic transformation that I have promised to deliver.” Experts say his popularity means he has a strong chance of delivering that majority, Al Jazeera reports. 

Faye won Senegal’s presidency in March with 54% of the vote. During his campaign, he proposed leaving the CFA Franc, a regional currency, and renegotiating energy contracts with foreign multinationals, among other policies, DW reports. According to Senegal’s constitution, snap elections must be held within 90 days; Faye has suggested November 17.

Namibia hires Chinese firms to build country’s largest solar plant

Namibia’s national power utility announced on Monday that it has hired two Chinese companies to build a solar power plant that is slated to be the nation’s largest. 

State-owned China Jiangxi International and private company Chint New Energy Development will build the $78 million plant over the next 18 months, with the goal of opening in 2026. German development bank KfW is providing four-fifths of the financing for the project, which will increase Namibia’s power capacity by 20%, Reuters reports.

The managing director of Namibia’s power utility said the plant will contribute to economic growth and sustainable development. Namibia has unveiled several renewable energy initiatives in recent years, including a billion-dollar plan backed by the EU to develop green hydrogen. Europe added to that scheme this week, pledging an additional $55 million to Namibia’s and South Africa’s green-hydrogen funds.

Asia

US considers doling out cash for interim government in Bangladesh

A delegation of US officials met with Bangladesh’s placeholder government this weekend, marking the first American engagement with the administration led by Nobel laureate Muhammad Yunus.

Yunus has led Bangladesh as chief advisor since mass protests ousted former Prime Minister Sheikh Hasina last month. He has been tasked with stabilizing Bangladesh’s economy after the pandemic and war in Ukraine lurched the south Asian economy into distress that culminated in a $4.7 billion IMF loan. 

The collapse of Hasina’s government delivered another shock, with some major fashion houses opting to move manufacturing to Southeast Asia, FT reports. Garment manufacturing is the engine of Bangladesh’s economy. Members of the American delegation said their goal was to “support Bangladesh’s economic growth, financial stability and development needs,” according to the US state department. 

Pakistan ‘meets conditions’ for $7bn IMF loan

Pakistan’s Prime Minister Shehbaz Sharif said this week the country has met the conditions set by the IMF to unlock a new $7 billion loan, days after Deputy Prime Minister accused the multilateral of stalling.

The announcement is a crucial step following a staff-level agreement reached in July between the fund and Pakistan. In that arrangement, the IMF requested that Pakistan broaden its tax base, improve its management of state-owned businesses, and scrap energy subsidies. If approved, the loan would be disbursed over the next three years.

Political tensions remain in the country, where former leader Imran Khan, its most popular political figure, has been imprisoned for the past year. Authorities arrested 13 figures associated with Khan’s Pakistan Tehreek-e-Insaf party on Monday and Tuesday, including party chairman Gohar Khan, Nikkei reports. Police released Gohar on Tuesday, although the other 12 remained in prison as of then, AP reports.

Typhoon wreaks havoc across SE Asia

A powerful typhoon struck Vietnam this week, killing more than 200 people in the country and leaving a path of destruction across the region. Typhoon Yagi dropped heavy rain over Vietnam’s mountainous north, triggering floods and landslides that inundated rural towns and submerged neighborhoods in the country’s capital Hanoi.

Authorities have not yet released a cost estimate of the damage, but some analysts expect the typhoon to be the worst natural disaster to afflict Vietnam in a generation, the New York Times reports.

The typhoon wreaked havoc across Southeast Asia. The storm killed at least 110 people in war-torn Myanmar and at least nine in Thailand. In Laos, water engulfed homes and markets. A woman observing the deluge in Vientiane, the capital, told a Frontier Markets News reporter that the flooding was the worst she had ever seen.

Middle East 

China and GCC make progress on trade deal

China’s Prime Minister Li Qiang visited the Gulf this week, meeting with Saudi Crown Prince Mohammed bin Salman and Gulf Cooperation Council officials to discuss advancing a free-trade deal that has been in the works for years, Reuters reports. The GCC’s Secretary General said he expected terms to be finalized “in the near future.”

China and Saudi Arabia are also pushing for a deeper bilateral trade relationship. According to China’s official readout of the meeting with Crown Prince bin Salman the two countries are working to “further ease market access [and] abolish all market access restrictions on foreign investment in manufacturing.”

Following the meeting, though likely not directly a consequence of it, Saudi Arabia announced that it would increase oil supplies to China beginning in October, as a result of price cuts from oil giant Aramco bringing import costs to their lowest levels in three years, and commitments from Chinese refineries on long term supply deals.

Oman’s sovereign wealth fund to ramp up IPOs

The Oman Investment Authority (OIA), the Sultanate’s sovereign wealth fund, is set to pursue a series of IPOs and private placements of its assets in energy, services and logistics through 2028, Zawya reports. The wave of privatizations is part of Oman’s Vision 2040 strategy, which is aimed at reducing its reliance on oil and gas revenues and state-directed investments and grow the role that tourism, high-tech, and green energy play in its development.

OQ SAOC, the Sultanate’s state-oil company, is the first to come to market, offering a 25% stake for some $2 billion, which it will use to fund an expansion in exploration and production, Bloomberg reports. Expected to be the largest IPO in the Middle East this year, OQ is offering to pay dividends and a performance-linked sweetener as it hopes to transform itself into a more dynamic energy major with investments in renewables and green energy.

Israel launches ground raid on Iranian weapons facilities in Syria

Israel launched a direct, “boots on the ground” operation in Syria targeting what it claims was an Iranian missile factory producing weapons for Hezbollah, the WSJ reports. Israeli strikes against Iranian assets in Syria by air—both piloted jets and unmanned drones—are a common occurrence, especially because the Assad regime has increasingly turned to Iran’s Revolutionary Guard Corps (IRGC) for support in winning its civil war, but direct ground incursions like this week’s special forces raid are extremely rare. 

The facility, apparently operated by the IRGC, was a hardened target buried underground since at least 2018, and was designed to be beyond the reach of conventional airstrikes—hence the need for a direct attack, Axios reports. A number of Syrian nationals guarding the facility were killed, but apparently no Iranians were hurt.

WSJ investigation finds serious management problems with Saudi Arabia’s Neom megaproject

An investigative report by the WSJ has revealed that the construction managers of the Neom megaproject have a “casual disregard” for worker safety, citing a recording made of senior staff writing-off a series of deadly workplace accidents to the “stupidity” of the South Asian migrants who make up the majority of the project’s labor force. Documents and recordings reviewed by the WSJ, including interviews with current and former executives, also implicate senior management in corruption and embezzlement investigations.  

Neom, still in its first of several phases of construction, has an official budget of $500 billion, with an expected total cost of over $2 trillion. However, amidst a cash crunch and growth slowdown in the country, particularly affecting its sovereign wealth fund the Public Investment Fund, Neom and other Vision 2030 projects have reportedly been scaled back as the government taps dividends from oil giant Aramco and the sovereign debt market to raise funds to address its growing fiscal imbalances.

Neom said it investigates every health-and-safety incident and allegations of management misconduct.

Europe

Serbia close to free-trade deal with Israel

Serbia and Israel are poised to strengthen economic ties with a new free-trade agreement, BalkanInsight reports. At a meeting in Belgrade, Israel’s President Isaac Herzog and Serbia’s President Aleksandar Vucic emphasized the urgency of concluding a deal as well as enhancing cooperation in technology, artificial intelligence and cybersecurity.

The two nations already have strong defense industry links. A recent BIRN investigation revealed significant arms exports from Serbia to Israel, totaling €23.1 million in 2024, with a notable €7.3 million shipment in July. While Serbia has condemned the Hamas attack on Israel, it has remained largely silent on the subsequent war in Gaza and reported atrocities.

Latin America

Peru cuts interest rates to regional low as economy quietly recovers 

Peru’s central bank has eased interest rates to 5.25%, positioning the Andean nation as the most accommodative among Latin America’s major economies, Bloomberg reports. While the country boasts the lowest inflation among major Latin American economies—lower even than in the US, Eurozone and Japan—it is also rebounding from a recession in 2023. 

GDP growth rose above 5% in April, the highest in 32 months, on the back of strong agriculture, mining and government spending. The expansion, though, has been uneven and is showing signs of faltering. 

The bank’s move could be a double-edged sword: Cutting rates below those of regional peers and on par with the lower bound of the US Federal Reserve’s target range could boost consumer spending while triggering capital outflows.

Venezuela risks a stagflation repeat

Venezuela’s bolivar has tumbled in unofficial markets since the country’s controversial presidential election, sinking to up to 20% below the official rate, Bloomberg reports. This marks the widest gap since 2022 and signals a potential return to the devastating cycle of hyperinflation and currency devaluation that plagued the nation over the past decade.

The root cause appears to be President Nicolás Maduro’s profligate spending during his election campaign, which has depleted the country’s hard-currency reserves, and a sharp reduction in dollar sales by the central bank. The situation is exacerbated by an overvalued official exchange rate that has remained nearly static despite monthly inflation running at 1.4%, creating an unsustainable economic imbalance.

• US sanctions Maduro allies linked to Venezuela’s disputed election (BBC) 

Analysts warn that without a significant adjustment to the exchange rate, Venezuela risks plunging back into stagflation. The government’s recent move to reduce bank reserve requirements in an attempt to stimulate lending appears insufficient to address the fundamental currency crisis.

Global

Emerging markets face strengthening headwinds

Weakening US consumer demand and a surge in Chinese exports threaten to undercut economic growth in emerging markets, according to Fitch. The ratings firm forecasts US consumption growth to slump from 2.2% in 2024 to 1.4% in 2025, potentially impacting countries reliant on US goods imports, tourism and remittances.

Simultaneously, slowing development in China has cut prices for key EM commodity exports such as copper, iron and soy. Mexico, Vietnam, Chile and several Caribbean nations are among those most exposed to this slowdown, with possible ripple effects on their sovereign ratings. 

Beijing’s attempt to export its excess manufacturing capacity is also putting pressure on EM industries from Indonesian textiles to Chilean steel. Beijing’s policies to subsidize domestic manufacturing have led to a surge in its trade balance since 2019, potentially displacing $360 billion in demand for imports from emerging markets. In response to a boom in cheap Chinese imports, countries as diverse as Brazil, Turkey and Thailand are implementing tariffs and investment requirements, the FT reports.

What We’re Reading

Tanzanian opposition figure found dead ahead of election (NYT)

Tanzania’s tourism earnings surpass $3.5bn (The Citizen)

Kenya asks its public to help fix the nation’s finances (Reuters)

Kenyan court says no to Indian firm Adani Group’s acquisition of Nairobi airport (FT)

Zambian copper mines desperate for power find an unlikely savior (Bloomberg)

Oil will boost Uganda’s economic growth to double digits, IMF says (IMF)

US to send Egypt $1.3bn in military aid (Washington Post)

US announces support for two permanent seats for Africa on UNSC (NYT)

African nations boost gold reserves amid economic uncertainty (Voice of America)

Major oil and gas reserve found in Pakistan’s waters (Offshore Technology)

Pakistan’s China-style firewall is rattling its tech industry (Rest of World)

Construction begins on Afghan portion of Turkmenistan-India gas pipeline (AP)

Thailand to distribute first $4bn in handout scheme in days (Bangkok Post)

Philippines says China firms keen to invest despite tensions (Bloomberg)

Laos hit hard by inflation, currency woes and plunging spending power (Nikkei)

Myanmar junta in talks with red cross to establish humanitarian corridor (Reuters)

Southeast Asia expected to boost coal trade as China approaches peak (Reuters)

China signs finance cooperation agreement with debt distressed Maldives (Reuters)

Maldives hunts for bailout to avoid first Islamic sovereign debt default (FT)

Uzbekistan to start processing Afghan crude as Taliban attempt oil revival (S&P Global)

Saudi Arabia reopens embassy in Syria, completing reconciliation with Assad regime (Middle East Monitor)

US and Iraq reach deal on withdrawal of most coalition forces by 2026 (Washington Post)

Iraqi Kurdistan continues to boost supplies despite Baghdad’s efforts to consolidate control over oil sector (S&P Global)

Russia signals more tightening after hiking rate to 19% (Bloomberg)

Russian assault may force Ukraine steelmakers to import coal (Bloomberg)

Ukraine businesses hire more women and teens amid labor shortages (Reuters)

Erdoğan courts big business to lure investors back to Turkey (FT)

The founders of El Salvador’s Chivo Wallet lead FTA negotiation with China (El Faro)

Lawmakers reject Colombia government’s 2025 budget proposal (Reuters)

Argentina reduces energy subsidies, calls for fresh investment (Reuters)

Milei’s tax amnesty lures Argentines to declare hidden millions (FT)

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Please consider becoming a paid supporter to help cover some of our costs and support our continued development of sharp markets-focused coverage and new informational products. Paid subscribers will also gain exclusive access to our quarterly EM/FM report that aggregates EM insights from 25 major banks, international institutions and consultancies.