growth

Beltone is a financial services group with 24 diversified funds and more than 100,000 clients. Khalil El Bawab, CEO of the Local & Regional Markets Division, shares the firm’s growth plans and challenges with Global Finance.

Beltone began in Cairo in 2002 as an asset management firm. In 2022, it was acquired by Emirati Chimera Investment, part of Abu Dhabi-based IHC. Since then, Beltone has completed two record capital increases—EGP 10 billion (about $210 million) in 2023, which at the time was the largest in Egyptian Exchange (EGX) history, and EGP 10.5 billion in 2025, which is now the record for the largest all-cash capital increase on the EGX. Today, Beltone is part of IHC’s new entity, 2PointZero, alongside eight other companies.

Global Finance: How is Beltone Holding currently structured?

Khalil El Bawab: Beltone is a fully fledged institution offering a wide range of services, including investment banking, brokerage, asset management, and custody services. Additionally, Beltone provides various non-banking financial services such as leasing, factoring, consumer and mortgage finance, SME finance, and microfinance. The organization also has a venture capital company that invests in startups through equity and venture debt. Beyond finance, Beltone has expanded into non-financial sectors, with businesses like Robin, which offers Data Science and AI solutions; Beltone Academy, focused on training and development; and Magnet, a human resources consultancy.

GF: What is your approach to the client’s needs?

Bawab: Traditionally, financial services were about selling products. However, amid the market’s emerging financial literacy levels, we shifted our focus on redefining the need. At Beltone, we pinpoint other needs for the clients and then we engineer tailored products around them. Here again, the approach is fully data-driven. For example, clients might not be aware of how to maximize their returns by moving their investments around between equities, fixed income products, precious metal funds, and other channels. Once the investor becomes aware of these diverse offerings and is aware of the ease of investing with Beltone, their need is redefined and met with a tailored portfolio of investing options. Credibility comes not from pushing the highest-commission product, but from ensuring that 5, 10, or 15 years later, clients can say they fulfilled their needs.

GF: How is the regulatory landscape supporting Beltone’s growth?

Bawab: The asset management industry in Egypt changed significantly in 2018. Before then, only banks and insurance companies could issue or sponsor funds. The new regulations allowed asset managers and investment banks to launch their own funds and brokerage firms to act as placement agents. This is a true milestone for the industry, allowing financial service providers to bridge the gap in terms of physical barriers, paperwork, and user experience for clients looking to invest.

Then, issuing a fund could take up to a year; now it takes just a very few days. Since then, more than 50 new funds have started, and that has completely changed the market. Also, the financial regulatory authority issued the FinTech License, which allows digital onboarding, including e-signatures and e-contracts, to help attract more investors to the market, effectively taking the market to new levels.

GF: You manage a large number of funds–why so many?

Bawab: We currently manage 24 funds, including 15 for banks, and plan to launch 5–6 more. All our funds have zero subscription or redemption fees — no entry or exit barriers. The market sees us as simply launching fund after fund, but it’s a conscious strategy and preparation for our upcoming wealth management application.

Today, we already offer the Beltone Trade App — the only investment bank-owned app not tied to a bank, giving qualified investors direct access to equities, fixed income products, and mutual funds. In early 2026, we’ll launch a second app that goes beyond robo-advisory. Clients will be digitally onboarded, complete a risk profiling exercise, and receive personalized advice on the optimal allocation for their investments. It could be single investments or incremental, with standard settlement instructions every month… I’m not concerned which channel the clients go to, but I want to equip them with the right tools to choose the products that best fit their needs.

GF: Who are the clients that you’re targeting?

Bawab: Generation Alpha. The ones who live on smartphones — they research everything and don’t want to interact with any human being. In fact, studies show people would rather visit the dentist than go to a bank! Egyptian law now allows 15-year-olds to open bank accounts and invest in the stock market. Our goal is to incentivize this generation early, with incremental investment plans matched by their guardians up to a limit. By starting at 15, we’re preparing the next driving force of our client base for the coming 10–15 years.

GF: Sounds like you are facing a huge financial literacy challenge.

Bawab: Sure, but you have it at all ages, and overall financial literacy in Egypt is improving rapidly. We are seeing tremendous growth in the number of new entrants opening brokerage accounts or participating in the stock market & mutual funds. We are still behind international standards, but our market growth is outpacing global benchmarks in terms of market participation. This is a collective effort that everybody is working on. The focus now is on making investing simpler and more accessible — and our upcoming wealth management app is designed to be exactly that: super simple and straightforward.

Thawing relations with Azerbaijan and Turkey are creating opportunities for Armenia to expand its economy and emerge as a regional investment hub.

The South Caucasus has hardly seemed an ideal place for investment in recent years. Azerbaijan’s successful military campaign to gain control over the ethnic Armenian-controlled region of Nagorno-Karabakh within its borders in September 2023, forced about 110,000 residents to flee to Armenia. Georgia, once a poster child for reform with the area’s most diversified economy, has turned away from the west; its application to join the EU is suspended and tensions have run high since last fall’s disputed elections.

Unexpectedly, it is Armenia—landlocked, with 3 million people and able to export only through Georgia since its borders with Azerbaijan and Turkey are currently closed—that has emerged as the region’s bright spot.

Between 2022 and 2024, GDP grew by an annual 9%, and while the pace has slowed, growth remains well above most similar economies, with 5% expected this year and 4% next, according to the European Bank for Reconstruction and Development (EBRD). Inflation is running at around 3.6%, kept in check by a cautious monetary policy, and FDI is on a rising trend, with expatriate Armenians leading the way.

“Armenia has benefitted from a sizeable inflow of high-skilled immigrants, mainly from Russia,” notes Dmitri Dolgin, chief economist covering Russia and Commonwealth of Independent States (CIS) countries at ING Bank, “which has led to higher remittances, stronger activity in financial and IT sectors, and overall stronger domestic demand for consumer goods, services, and real estate.” Finance, IT, construction, and consumer demand-driven sectors have been the main growth drivers, he says.

The capital of Yerevan has been transformed into a regional magnet for startups and digital professionals, fuelling demand across sectors and lifting productivity, says George Akhalkatsi, head of the EBRD’s resident office there.

“The economic surge has been shaped by a unique convergence of external shocks, internal resilience, strategic adaptation, and a remarkable upswing in growth triggered by a wave of migration,” he says, echoing Dolgin’s observation. “This influx brought not only people but also capital, skills, and entrepreneurial energy, especially in tech and services.” 

An unexpected thaw in relations with Muslim-majority Azerbaijan could have major economic implications for Christian-majority Armenia, now that their three-decade conflict over Nagorno-Karabakh has been resolved.

Tensions ease

Thawing relations between Azerbaijan’s President Ilham Aliyev and Armenian Prime Minister Nikol Pashinian, beginning with the latter’s recognition of the reality of Azerbaijan’s decisive military victory, led to a peace agreement being concluded earlier this year. On August 8 the two signed the resulting treaty, overseen by President Donald Trump at the White House.

The accord lays the basis for development of the Zangezur transport corridor connecting Azerbaijan to its Nakhchivan exclave, sandwiched between Armenia and Iran, to be managed and developed by US companies working in conjunction with Yerevan. Dubbed TRIPP (Trump Route for Peace and Prosperity), the transit route aims to encourage a wider rapprochement between the two countries and throw open opportunities across the region. One analyst suggested that Armenia could “leverage the corridor to integrate into wider trade networks linking the Persian Gulf, Black Sea and Eurasian corridors, [helping)] diversify its economy, attract FDI, and normalize relations with its neighbors.”

The potential for an upset remains considerable, not least due to Armenia’s concerns about its sovereignty, although the involvement of US companies could partially assuage Yerevan’s fears. Sensitivities run high: when Aliyev used the term Zangezur—which has territorial implications for Armenia—in a press conference, Pashinian’s spokesperson said the “narrative presented cannot in any way pertain to the territory of the Republic of Armenia. Only the TRIPP and Crossroads of Peace projects are being implemented, as clearly stipulated in international documents.”

Such sensitivities matter, with parliamentary elections due next year in Armenia. Also of concern is Russian disquiet about its ally getting too close to Washington; Moscow has a military base in Armenia and supplies most of its energy while the country remains an active member of the Moscow-led Eurasian Economic Union (EAEU).

Observers nevertheless are excited about the possibilities.

“Baku has welcomed US involvement, particularly amid increased tensions with Moscow,” says Tinatin Japaridze, analyst at Eurasia Group. “Meanwhile Yerevan, which had previously expressed reservations about foreign oversight at its checkpoints, has reportedly received assurances that its sovereignty and territorial integrity will be fully respected. Discussions are now underway to select a private operator for the corridor.”

Arvind Ramakrishnan, director and primary rating analyst at Fitch Ratings, which rates Armenia BB- with a stable outlook, points to warming relations between Yerevan and Turkey, an ally of Azerbaijan, as evidence of a wider change within the region.

“The peace framework sets the stage not just for lasting settlement but also improved relations with Turkey,” he argues. “Pashinian and Turkish President Recep Erdoğan held a summit in Ankara in June, and the Turkish market is a huge opportunity for Armenia. Turks are also keen to invest there.”

Sectors that could benefit from Turkish investment include IT, construction, and finance, and small manufacturing and retail are other likely growth areas. Tourism may also benefit, with Turkish Airlines due to start direct flights between the two countries.

ING’s Dolgin lays out a wider menu of possibilities.

“If the peace process holds,” he suggests, “then logistics, warehousing, trucking/rail services, border services, and trade finance could gain, with positive spillovers to SMEs along east-west supply chains. Reduced uncertainty could also help FDI in light manufacturing and services that leverage Armenia’s skilled labor and diaspora links.” A reduced risk of hostilities could lead some Armenians living abroad to repatriate, along with their capital.

The EBRD notes that shipping via Georgia—Armenia’s main transit route at present—is expensive and slow, and that access to Azeri and Turkish ports through open borders with both countries would be beneficial.

“Armenia’s normalization of relationships with its neighbours is key, and the unblocking of regional trade and energy routes should support this process,” says Akhalkatsi. “Armenia has a great potential when it comes to renewable energy, and we could see significant FDI in solar power generation once there is capacity in the electricity grid to export this excess electricity.”

He points to the development of an AI supercomputing hub in Armenia, a mega project announced in July and valued at over $500 million, which could presage a significant increase in FDI while preparing the ground for further tech-sector development in the country and the wider region.  

The EBRD is one of the largest investors in Armenia, with nearly €2.5 billion (about $2.7 billion) committed across 231 projects, 84% of which support the private sector. Earlier this year, it launched a new strategy for the country focused on sustainable infrastructure and the green transition and boosting private-sector competitiveness. The bank is also deploying its flagship Capital Markets Support Programme, supported by the EU, in Armenia.

“The aim is to strengthen Armenia’s local capital markets by supporting corporate issuers of bonds and equity,” says Akhalkatsi. “The program addresses key challenges such as limited expertise in capital market financing and high issuance costs.” 

Challenges Ahead

Aside from maximizing opportunities arising from rapprochement with its neighbors, the government faces other, longer term challenges. Among them is unemployment of around 14%, a situation compounded by a skills mismatch due to years of underinvestment in training and the influx of ethnic Armenians from Nagorno-Karabakh. Integration of these refugees remains a major financial and political challenge.  

Energy dependence on Russia is another concern, although plans to replace the aging Metsamor nuclear facility with a new nuclear plant, along with ongoing renewable projects, aim to bolster long-term energy security. 

Fitch sees public finances as the main consideration in assessing such plans. “Public debt could hit 60% of GDP by 2030, so any development that slows or reverses this is positive,” says Ramakrishnan. If current hopes are realized, concerns like unemployment, underinvestment, and energy security will recede, he predicts. Lower defense spending would free up monies from the budget while improved relations with Azerbaijan and Turkey bolster trade and investment. Improved public-sector finances would also enable a greater focus on improving the business environment and governance, bolstering FDI across the economy over the long term.

North Africa is emerging as a growth engine, led by Egypt and Morocco. But structural challenges persist.

This year again, North Africa is the fastest growing region in Africa and the Arab world. Combined GDP growth in Mauritania, Morocco, Algeria, Tunisia, Egypt, and Libya is expected to reach 4% in 2025, compared to 3.9% for the rest of the continent and 2% in the Middle East, according to the International Monetary Fund.

They aim to keep the trend going. Despite differing economic trajectories, the six countries have signed multiple agreements over the years to boost trade. Chronic political tensions have limited the impact of these deals, and North Africa is far from being a unified market. But there is still growth potential.

In 2023, Egypt’s exports to North Africa reached a record $3.5 billion, or 9% of total exports. Trade with Morocco has nearly doubled over the past decade and Libya is Egypt’s largest regional export market, with many Egyptian companies playing a role in the war-torn country’s reconstruction.

In support of corporate activity, many of the region’s local banks have established a cross-border footprint. Attijariwafa Bank, Morocco’s leading institution, operates in Tunisia, Mauritania, and Egypt. Algerian banks have recently expanded into Mauritania and Tunisia’s Banque International Arabe de Tunisie (BIAT) which has offices in Libya.

“Many Tunisian SMEs export to Libya and vice versa, and this sector holds strong growth potential,” says Elyes Jebir, general director of BIAT, Tunisia’s largest bank by assets.

For now, Europe is still the main trading partner for North African countries, but Morocco and Egypt are also increasingly looking south of the Sahara for new ventures.

“Our added value is supplying safe and effective products at an affordable price,” says Seif Yashar Helmy, director of international affairs at Pharco Pharmaceuticals, which ships 20% of its exports—worth $9 million a year—to other parts of Africa and expects strong growth in the coming years thanks to a new line of World Health Organization-approved mRNA vaccine.

Egypt And Morocco Lead The Way

Egypt is by far North Africa’s largest market with a population of over 110 million, half of whom are under 30. The country is emerging from a severe fiscal crisis that almost led to bankruptcy in 2024, but is expected to post a solid 3.8% GDP growth this year, according to the IMF. While the economy relies heavily on foreign support and imports, Cairo, Africa’s largest city, has a strong industrial base across sectors including textiles, food processing, and automotive.

Pharco, Egypt’s leading pharmaceutical maker, produces 1.7 million boxes of drugs a day. During last year’s crisis, it had to scale back some production, but optimism is returning.

“We see the economy picking up, and prospects are good,” says Helmy. Pharco recently invested $350,000 in Medoc, a clinic management startup. “Egypt is underserved in healthcare, be it clinics, polyclinics, laboratories, imagery, and that opens opportunities.”

Recent reforms, including the floating of the Egyptian pound, have helped stabilize the economy and rekindled foreign investors’ interest. Many local companies are seeking new global partners, and a robust pipeline of IPOs is expected on the Egyptian Stock Exchange.

“The laws are becoming more flexible for foreigners to invest, and we see a lot of appetite for foreign direct investment [FDI] coming from Europe and the Gulf Cooperation Council,” Helmy notes.

Egypt also boasts some of Africa’s largest banks and most successful financial innovators. Fawry and MNT Halan were among the region’s first fintechs to reach $1 billion valuations. Today, Cairo is one of Africa’s top three fintech hubs, home to hundreds of startups from giants like Paymob to emerging players such as Sahl and Kilivvr.

For fintech entrepreneurs, structural challenges, from low financial literacy to currency devaluation, are creating space for innovation.

“There’s a universal problem in our region, which is a lack of foreign currency, combined with rising inflation, shooting consumer price indices, and no investment products,” says Ahmed Amer, CEO of Web3 tech provider EMURGO Labs. “People basically only have two ways of investing their money, either in gold or in real estate.” EMURGO has supported the launch of USDA, a stablecoin regulated by the US Securities and Exchange Commission that is pegged to the US dollar for trade finance and remittances.

“It’s really important that emerging economies start thinking outside of the box to develop new ways of attracting and preserving capital,” Amer adds.

Traditional banks are moving in the same direction. “We’re investing heavily in building a group-wide data infrastructure, not only in Egypt but across our African footprint,” says Islam Zekry, group CFO and COO at Commercial International Bank (Egypt), the country’s largest private bank. “One clear opportunity lies in streamlining KYC and compliance processes. By creating an integrated data warehouse and sharing verified customer intelligence across our markets, we expect to reduce the cost to serve by 20% to 30%. We aspire to be a platform that attracts capital, connects businesses, and delivers a new standard of banking experiences, all while being proudly rooted in Egypt.”

Morocco is the second pillar of North Africa’s economy. Decades of economic reforms encouraging private sector growth and infrastructure investment have turned the country into an FDI magnet. Today, Morocco is considered one of the best places in Africa to do business, with global giants including Procter & Gamble, Unilever, Siemens, and AstraZeneca setting up factories and regional headquarters in the kingdom. Despite global headwinds, the IMF expects Morocco’s GDP to grow 3.9% this year.

Tunisia Faces Headwings

Other North African countries present a different story.

Mauritania, Algeria, and Libya remain largely shut off, rent-driven economies. In Tunisia, despite years of deep economic and financial turmoil, the government still has not enacted reforms that could unlock IMF support.

Last year, the Central Bank of Tunisia had to step in to bail out the economy, and the IMF projects growth for 2025 at just 1.4%. That said, the banking sector has held up relatively well. In March, Moody’s upgraded Tunisia’s sovereign debt rating to Caa1 from Caa2, citing the central bank’s ability to maintain stable foreign exchange reserves.

“Results for 2023, 2024, and the first half of 2025 demonstrate the resilience of Tunisian banks,” argues BIAT’s Jebir. “I believe we can expect progress in Tunisia’s next reviews, which would have a positive knock-on effect for banks’ ratings. This would enable us to expand further internationally without being constrained.”

Tunisia’s banking model is still largely brick-and-mortar, but modernization efforts are underway. This year, the government passed laws restricting the use of paper checks and encouraging digital payments. Jebir sees an opportunity in the shift.

“We are developing a wide range of digital solutions for both retail and corporate clients,” he says. “At the same time, we are reshaping our branch network into advisory and expertise centers, providing added value beyond the traditional services of a bank.”

A fintech ecosystem is emerging, with startups such as mobile wallet Floucy, but international investors remain cautious.

“It’s tough to operate there,” says Amer, who has supported Tunisian startups in the past. “I mean, it’s very hard to attract FDI when your fiscal and monetary policy doesn’t provide any confidence to the investors, right?”

Looking South

As their own economies improve, North African companies are looking south for expansion, supported by their banks. Moroccan lenders now operate across the continent; Bank of Africa, Attijariwafa, and BCP Group cover more than 25 African countries, from Senegal to Ethiopia. Egyptian banks, including CIB and Banque Misr, are following trade corridors in East Africa using Kenya as a regional base.

“We’re enhancing SME lending through digital partnerships, leveraging the country’s well-developed ecosystem,” says CIB’s Zekry. “We’re also advancing digital channels to scale access and deepen client engagement, reflecting our broader model of localized innovation with regional consistency.”

Zekry also sees growth potential in climate finance. “As we expand across Africa, a significant share of our growth will come from transitional finance, particularly in agricultural and underserved communities. We’re introducing specialized services in these areas, not just as a development goal but because they make strong business sense.”

Cross-border trade, industrial strength, and financial innovation are opening new opportunities throughout North Africa, but structural issues remain. “The potential is massive, but reforms need to continue and the capacity to introduce new technologies will be critical,” Amer observes. If these elements align, North Africa could realize its aspiration to become a strategic hub connecting Europe, the Middle East, and sub-Saharan Africa.

Deindustrialization and recommodification have been setting Latin American economies back for decades. Can a push for greater productivity put them on track again?

In the 10 years from 2014 to 2023, Latin America’s aggregate economy managed to quietly reach depths unknown even during the dismal Lost Decade that followed the onset of the region’s debt crisis in 1982. The recent period logged average annual growth rates of 0.9%, compared to 2% a year four decades ago, notes Marco Llinás, head of Production, Productivity and Management Division at the Economic Commission for Latin America and the Caribbean (ECLAC), a UN agency based in Santiago, Chile.

The Covid-19 pandemic made a dent, but two parallel trends contributed steadily throughout the period: deindustrialization and the recommodification of exports. Their origins predate 2014, and they can be observed across the region, with perhaps the exception of Mexico.

Future economic historians may wonder why nobody saw it coming, although contemporary analysts still disagree about the relative importance of the two elements. “The phenomenon of deindustrialization is not the same as recommodification,” says Llinás. “The two phenomena may or may not happen at the same time.”

Both continue to play out amid a confluence of factors: the decline and fall of globalization, China’s growing role in the region, and the Trump tariffs, to mention just a few. But how did it start?

Economists of all ideological stripes tend to agree on the steps that have traditionally facilitated the march from underdeveloped to developed. Nations begin with low value-added production and basic services. Then comes industrial development and the emergence of a working middle class. Ultimately, services prevail, often high-end ones fueled by technology. Think of South Korea. In the 1950s, it made headlines for battles in the Korean War over uninhabited strategic landmarks like Pork Chop Hill. Now, it is known as the home of Blackpink.

Until the debt crisis of the 1980s, Latin America seemed to be holding its own. Its aggregate growth rate was 5.2% per year (6.8% in powerhouse Brazil) from 1951 to 1980, ahead of the world (4.5%) and not much shy of Korea (7.5%) and Japan (7.9%), according to a 2004 paper by the Inter-American Development Bank. Using a narrow definition of manufactures, Brazil more than doubled the share of industrial exports in GDP from 10.8% in 1968 to 23% in 1973, fueled by industrial growth of 13.3% a year during that brief period known as the Brazilian Miracle.

From 1981 to 1993, saddled with the debt crisis and its aftershocks, the region stumbled behind with 1.7% annual growth while Korea continued to sprint ahead at 7.2%. As globalization began to help lift parts of the world out of poverty—albeit unequally—in the 1990s, Latin America mostly watched from the sidelines: either by choice, preferring relative isolation, or due to lack of competitiveness.

Premature Deindustrialization

“Premature deindustrialization” is the term economists use to describe a shift away from manufacturing before the economy in question has attained a robust level of industrial production. It happens at income levels lower than today’s richest nations have historically reached. The latter are sometimes called “post-industrial” societies, characterized by high-end, technologically enhanced service sectors.

Premature deindustrialization has also occurred in sub-Saharan Africa and parts of East Asia. But it’s especially striking in Latin America, given the very different trajectory its economies were on prior to the 1980s.

“Argentina’s manufacturing subsystem shows a clear shift toward low-tech employment, with an increasing dominance of low- and medium-low-tech industries, undermining the potential for higher-value-added manufacturing,” Martin Lábaj and Erika Majzlíková of the Bratislava University of Economics and Business write in a recent paper. Brazil “faces the most severe deindustrialization, characterized by a growing reliance on low-tech manufacturing and low-knowledge-intensive services, exacerbating its economic challenges.”

The contribution of manufacturing industries to Brazilian GDP fell from 36% in 1985 to just 11% in 2023, according to official statistics. “Why is it a problem?” Llinás asks. “Because industry has higher productivity and faster productivity growth. Plus, greater potential for expansion.”

Multiple factors cause premature deindustrialization, economists say: globalization; automation, stunting job growth; shrinking global demand for products.

They also point to a litany of “structural factors” that run from resource dependence to weak institutions; and policies that stunt investment such as high taxes, red tape, poor infrastructure, and cumbersome labor laws. “The country is very closed,” says Sérgio Goldman, a São Paulo-based corporate finance consultant, referring to his native Brazil.

Imports began to grow—from $60.4 billion in 1990 to $359.4 billion in 2000, according to World Bank statistics. A dominant traditional trade partner increased its exports of manufactured products to the region. Indeed, evidence of the political nature of Trump’s 50% tariff on Brazil included the fact that the US had a trade surplus with that country.

More recently, observers highlight closer trade ties with China and a subsequent influx of cheap manufactured goods, sometimes sending local producers reeling. “The auto parts sector in Colombia was really hurt by Chinese competition,” says William Maloney, chief economist for the Latin America and Caribbean region at the World Bank Group.

Given many countries’ history of protectionism, innovation is not top-ofmind among Latin American executives, according to Goldman. “My problem is with management,” he says. “Companies lack good managers.”

Whereas Japan parlayed its once abundant copper deposits into the establishment of leading global firms in the sector, Chile never seemed able to follow suit, Maloney notes: “In Chile, only a few firms are near the technological frontier.”

But is deindustrialization due primarily to “automation, trade, robots, or the China shock?” he asks. “It isn’t exactly clear.”

Recommodification

The second significant trend is “recommodification,” or the “reprimarization” of exports.

Thought to be emerging from commodity dependence during the last century, Latin America fell back on churning out greater volumes of raw materials during the commodity boom of the 2000s.

Driven by demand from China, but also India and other fast-growing economies, a 2000-2014 super cycle was followed by a second surge at the beginning of this decade. Each wave tends to leave export volumes at higher baselines; Brazilian soybean exports keep setting records, for example.

Commodities as a percentage of total exports in 2000 vs. 2020 jumped from 41.1% to 55.6% in Brazil, 63.1% to 83.2% in Chile, 55.6% to 65.1% in Colombia, and 73.2% to 85.3% in Peru, according to data provider Trading Economics.

Comparing 2024 to 2023, “agricultural products (11%) and mining and oil (11%) were the main contributors to growth in goods exports, while manufacturing exports remained stagnant,” ECLAC reports.

“Productivity Is Everything”

Pundits and policymakers are notoriously disputatious when it comes to Latin America; the region has dabbled for decades in everything from import substitution to the free market liberalism of the Milton Friedman-inspired Chicago Boys. Nowadays, however, they seem to be reaching a near consensus.

The post-2014 downturn “is in large part due to stagnant and even declining productivity,” posits Llinás. He adds, paraphrasing Nobel Prize-winning American economist Paul Krugman, “productivity isn’t everything, but in the long run it is everything.”

Four of the region’s leading economies—Brazil, Chile, Colombia, and Mexico—are implementing what Llinás calls “productive policies,” which he is careful to distinguish from old-school industrialization strategies. A common characteristic: the selection of a handful of priority sectors, industrial or not. These may include agriculture, mining, or services such as sustainable tourism.

The Brazilan program, for example, earmarked R$300 billion for credit, public purchases, regulatory reform, and infrastructure investments designed to benefit six sectors during the initial 2024-2026 period.

Investment in commodities also has its champions, especially given the potential for innovative spin-offs. Efforts to improve business practices in sectors such as mining and agribusiness can spur investments related to industrial processes and highend services, for example, say Llinás and Kieran Gartlan, a São Paulo-based managing partner of The Yield Lab Latam, a venture capital fund focused on agrifood and climate technology. Gartlan refers to large-scale farms such as Brazilian soybean producers as “open air factories” and points to start-up suppliers that are developing new technologies in fintech, drones, biotechnology, and beyond. His firm has mapped some 3,000 high tech start-ups in the Latin American agricultural sector.

But credit availability is proving a roadblock.

Private banks “don’t really have an appetitive” for farming, Gartlan notes; lacking the expertise to properly evaluate risk, “they put up big spreads that make [credit] expensive for farmers.” Many relatively large producers fail to invest in silos to store crops for sale when prices go up, for example. Instead, they live from harvest to harvest, paying off last season’s bills as the crop comes in.

The will to transform Latin America’s economy—much of it—in a more productive direction is there; the next step is for investors and lenders to buy in.

Challa Sreenivasulu Setty took over as chairman of the State Bank of India, named Best Consumer Bank, in August of last year. He discusses SBI’s digital journey, the trajectory of its consumer banking businesses, and the challenge posed by AI and fintechs.

Global Finance: The State Bank of India (SBI), the country’s largest bank, posted solid returns in 2024. How did you achieve this, and is it repeatable?

Challa Sreenivasulu Setty: Our strong fiscal-year 2025 performance stemmed from a disciplined growth strategy, prudent risk management, and leveraging our diversified portfolio. We saw healthy credit growth across the retail, SME, and corporate segments. Most importantly, we achieved these returns while improving asset quality, led by robust underwriting, rigorous credit monitoring, and recovery efforts. We balanced loan book expansion with strong low-cost deposits, ensuring stable margins. This was underpinned by cost efficiencies from digitalization. We are confident that these results are sustainable as they rest on the pillars of consistency, productivity, and resilience. As India’s economy continues to expand, we see opportunity for SBI to grow while maintaining our capital position, technology edge, and customer trust.

GF: What are the latest consumer banking milestones SBI has reached on its digital transformation journey?

Setty: SBI’s digital journey is spearheaded by our flagship You Only Need One [YONO] platform, which offers both mobile and branch banking.

YONO has surpassed 90 million registered users, with over 65% of savings account openings and over 40% of personal loans sourced digitally. We also have 140 million registered users on our Retail Internet Banking platform, besides 7.2 million registrations on WhatsApp Banking, which is currently being offered in six languages.

This scale demonstrates our success in driving digital inclusion; we are bringing millions of customers, from urban millennials to rural users, onto digital banking. Initiatives like YONO Business, YONO Global, video-KYC onboarding, and end-to-end loan processing are redefining convenience. The next phase is embedding generative AI for hyper-personalization and predictive engagement, making digital not just a channel but the core of our customer experience.

All these efforts underscore SBI’s digital transformation journey. From an institution with over 200 years of legacy, we have reinvented ourselves as a future-ready, digital-first bank.

GF: How is SBI improving customer experience in consumer banking? What role does AI play?

Setty: Enhancing customer experience is central to everything we do at SBI, driven by an unwavering customer obsession that shapes our decisions and priorities. To improve service quality, we measure customer experience using various metrics and are simplifying processes to reduce turnaround times. Our omnichannel and multilingual approach ensures seamless transactions across platforms.

By using analytics and AI, we are moving toward an anticipatory customer service approach rather than merely pushing generic offers as a reactive approach. Branches are being reimagined as advisory hubs while routine services are being migrated to digital channels. Our mission to be the Bank of Choice is built on trust and rests on delivering superior, personalized experiences at every touchpoint.

GF: Where do you see growth in the coming year for consumer banking and the geographies SBI serves?

Setty: Domestically, SBI already has unparalleled reach, but we see significant headroom to grow further in consumer banking across India’s length and breadth. The growth in consumer banking will primarily come from proactively fulfilling the evolving needs of people as the middle-income classes grow and scaling of firms creates new wealth and redistribution opportunities.

SBI’s retail personal loan book grew in the range of 11% to 14% in the last few quarters owing to robust growth in housing loans. Retail credit, particularly home loans and personal loans, will remain our growth engines. We are also expanding in semiurban and rural geographies, supported by financial inclusion initiatives and government schemes.

Internationally, we see potential in markets with large Indian diaspora populations, and digital expansion through YONO Global roll-out is enabling us to serve geographies where we do not have significant physical presence. We are deepening our reach by selling more products per customer and widening it by entering new markets across the globe.

This two-pronged approach gives us confidence that SBI will continue to expand vigorously, both at home and abroad.

The first female governor of the National Bank of Cambodia is upbeat about its ability to navigate global and internal uncertainties and capitalize on pending reforms.

Global Finance: What is the outlook for growth and inflation for the remainder of 2025?

Chea Serey: Cambodia’s economy is projected to grow around 5% in 2025 based on the government’s latest projection. During the first seven months, economic growth expanded robustly, although uneven across sectors. Garment exports surged 21.3% due to front-loading orders ahead of US tariffs, while non-garment exports rose 14%, benefiting from diversification policies, but this momentum may ease later this year. Simultaneously, tourism recovered steadily before the Cambodia-Thailand border conflict, though modest growth is expected going forward.

Inflation is forecast at 2.4% in 2025, driven by the softening of oil and food prices. Despite the border closure disrupting Cambodia-Thailand trade, the impact on inflation has been marginal. Price stability is also attributed to the stable exchange rate.

GF: The second and third sub-programs of the “Inclusive and Sustainable Financial Development Program” run until 2029. How will they effect change in Cambodia’s financial system?

Serey: The second and third sub-programs will strengthen Cambodia’s financial system by improving stability, expanding access, and supporting sustainable growth. We are focusing on financial literacy, consumer protection, and wider access to digital and non-bank services—especially for women and underserved groups. At the same time, we’re introducing sustainable finance tools and enhancing oversight to ensure long-term resilience. New financial products and market developments will help channel investment, increase liquidity, and promote use of the riel. These reforms are key to building a modern, inclusive, and sustainable financial system for Cambodia’s future.

GF: How has the use of the Bakong altered Cambodia’s financial landscape?

Serey: Launched in October 2020, the blockchain-based Bakong system has transformed Cambodia’s financial sector by addressing payment platform interoperability, promoting financial inclusion, enhancing efficiency in payment systems, and strengthening payment in local currency. By July 2025, it had 70 banking and financial member institutions, reaching over 34 million accounts. As of 2024, Bakong processed 600 million transactions worth $147 billion, some three times the value of Cambodia’s GDP. The National Bank of Cambodia (NBC) continues its efforts to promote the usage of the Bakong system by partnering with regional countries like Malaysia, Thailand, Vietnam, Lao PDR, Korea, China, as well as Japan, and facilitating convenient digital payments for tourists via the new Bakong Tourists App.

GF: Is the threat of debt distress when the forbearance regime is lifted in December of great concern?

Serey: To ease debt burdens, loan restructuring has been provided to vulnerable groups and businesses impacted by the Covid-19 pandemic and ongoing border conflict. Non-performing loans (NPL) reached 8% as of Q2 2025; this number is partly due to the sharp slowdown in credit growth to 2% when faced with global and internal uncertainties. The NBC is monitoring closely the adequate provisioning and the overall performance of financial institutions because of this high NPL. On the systemic level, financial institutions’ capital adequacy ratios remain strong with ample liquidity. The NBC will continue to monitor debt overhang and maintain flexibility in its macroprudential policies. It is especially important for us to be a strong guardian of financial stability and support economic activity during challenging and uncertain times like right now. 

Despite uncertainty in the international environment, Róger Madrigal López expects stable growth for the Costa Rican economy.

Global Finance: What is your view about the Costa Rican economy in the next 12 months?

Róger Madrigal López: Costa Rica is a small, open economy, exposed to the global political and economic environment. Despite the geopolitical conflicts and the challenges arising from the slowdown in international economic activity, projections from international organizations and the Central Bank of Costa Rica (BCCR) indicate that the Costa Rican economy is on a path of moderate and stable growth over the next 12 months.

The BCCR anticipates GDP growth of 3.8% in 2025, driven primarily by domestic demand and the robust performance of goods exports, particularly in medical devices and agricultural products such as pineapples. Although a slowdown in economic activity is anticipated for 2026, the projected growth remains above the global average, reflecting the resilience of the national economy in an uncertain international environment marked by trade and geopolitical tensions.

Regarding inflation, prices have remained low and stable, with general inflation averaging 0% and core inflation at 0.8% during the first half of 2025. Inflation expectations are anchored within the target of 3% and its tolerance range of ±1 %. Inflation is expected to return to the tolerance range by mid-2026, reinforcing confidence in the BCCR’s ability to keep down inflationary pressures originating from monetary forces.

Labor market conditions continue to improve, with the unemployment rate dropping to 7.4%. Real incomes have risen, particularly in the private sector and among women, and formal employment has expanded.

The central government will continue to show primary surpluses and a gradual reduction in the debt-to-GDP ratio, contributing to fiscal sustainability and improving the country’s risk perception.

GF: Did you see progress in reforms that support long-term growth, including improving human capital, enhancing infrastructure, and fostering competition? If so, which ones in particular?

Madrigal López: Costa Rica needs additional efforts to improve the educational level of the population in vulnerable areas, further promote tourism, and consolidate infrastructure provision models based on public-private partnerships; however, in recent years, the country has made meaningful strides in implementing reforms that support long-term growth, particularly in areas critical to investors and policymakers. For example, in human capital development, the country’s authorities have focused on reducing informal employment, expanding bilingualism, and improving access to early education and care.

On the infrastructure and competitiveness front, Costa Rica is advancing climate-resilient public investment through partnerships, such as the IMF’s Resilience and Sustainability Facility. This not only supports sustainable development but also opens opportunities for green finance.

The country is also working to institutionalize the autonomy of its central bank, a move that reinforces macroeconomic stability and investor confidence. Meanwhile, regulatory reforms are underway to reduce barriers to formal business creation and enhance competition. These reforms collectively position Costa Rica as a more attractive and stable destination for long-term investment.

GF: A year ago, you explained how an amendment of Article 188 of the Costa Rican Constitution would grant the BCCR administrative and governance autonomy. Any progress on that?

Madrigal López: The reform enjoys broad support from international partners such as the IMF and OECD, which view it as a milestone for safeguarding price stability and strengthening investor confidence. While approval is still pending, the IMF has urged Costa Rican authorities to move forward without delay, recognizing the reform as a cornerstone of the country’s medium-term institutional agenda. This proposed amendment was part of the agenda during extraordinary sessions in May-July of 2025, but made little progress.

GF: What keeps you up at night?

Madrigal López: As a central banker, my main concern is the commitment to maintaining low and stable inflation, as established by our Organic Law. In this way, the entity that I represent can contribute to the country’s macroeconomic stability, facilitate efficient economic decision-making by various stakeholders, and, in turn, preserve the central bank’s institutional credibility.

Tariff fights, rising US debt, and policy volatility weigh on global expansion—even as AI investment fuels some resilience.

This has been a turbulent year, marked by uncertainty over global economic policies. US tariffs remain undefined in form and scope, fueling instability. Global growth is projected to ease in the final months of this year and into 2026. The US economy, with a big assist from huge investments in AI, will likely continue outperforming Europe, while China, though slowing, is still expected to outpace both. Economists anticipate moderating growth, but few foresee a sharp downturn, even amid the United States’ significant shift in trade policy.

“Unprecedented uncertainty is what best captures the moment.”

Drew DeLong, Kearney

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“The global economy is going to grow below potential this year and next. In early 2025, front-loaded activity—like stockpiling ahead of new tariffs—pushed the numbers up, so they looked good midyear. But we expect the global economy to slow in the second half of 2025,” Elena Duggar, Managing Director at Moody’s Macroeconomic Board, said.

Growth in the US is expected to slow to 1.5% in 2025 and remain subdued in 2026, according to Duggar, despite big investments in AI. The euro area is expected to expand by 1.1% this year, slightly higher than in 2024, and increase by 1.4% in 2026. China’s growth is forecasted to slow somewhat this year to 4.7% compared to 2024, then decline to 4% in 2026.

“Why the slowdown? Mainly because that frontloaded trade activity is fading, policy uncertainty remains very high compared with historical standards—holding back investment decisions—and tariffs are beginning to show up, weighing on consumer spending and company margins,” says Duggar.

Tariffs’ Expansion Rattles Trade

Trade tariffs are hardly a new tool in Washington’s policy arsenal. The first Trump administration reintroduced them as a central economic lever, and the Biden administration, while softening the rhetoric, kept many of those measures in place and even broadened them in certain sectors such as cars.

What has changed this year is not the existence of tariffs, but their scale and reach. The United States, standard-bearer of open markets and promotion of global trade for more than eight decades, has taken a dramatic turn. The latest tariff package marks a sweeping departure from its traditional role, with a radical shift in strategy that could reshape the global economic order.

The nonpartisan policy research center Yale’s Budget Lab estimates that average tariffs are around 18%, compared to just 2.7% last year. But this doesn’t seem like where they will settle.

“I have nothing against tariffs per se. They’re just another tax, and especially when tariffs are designed to promote certain sectors of strategic interest,” says David Andolfatto, former St. Louis Fed researcher, who became Chair of the Economics Department at the University of Miami’s Herbert Business School in 2022.

“My feeling from the beginning was that these tariffs were not a big deal because the United States is such a large, diversified economy. If the tariffs were negotiated and put in place, everybody understood the rules of the game. But the uncertainty is so wide and large that I think it just cannot be good,” Andolfatto tells Global Finance.

A flurry of contradictory announcements, often based on executive orders, with different views and stop-and-go decisions, has defined the tariff announcements since April. Some of this depended on President Trump’s various announcements, some on the ongoing bilateral deals, and some on the court decisions regarding these actions.

At the end of August, a federal appeals court upheld an earlier ruling that the Administration’s reliance on the International Emergency Economic Powers Act (IEEPA)—a legal tool heavily used to justify broad tariffs—was not valid. The decision strikes at the core of Trump’s trade strategy. Unless the Supreme Court overturns the ruling, the president could be forced to seek congressional approval to keep his broad tariffs in place—measures critics argue are essentially new taxes that only lawmakers have the authority to impose.

Tariffs Are Here To Stay

Tariff uncertainties significantly impact investment decisions, including those of companies considering manufacturing in the US to avoid tariffs. “It is a very difficult time to be an executive trying to make decisions, and I feel like it’s a very cliche phrase, but unprecedented uncertainty is what best captures the moment,” says Drew DeLong, Principal at consulting firm Kearney, based in Dallas.

However, DeLong adds, no matter what the final shape tariffs assume, the tariff approach to international trade is here to stay. And it will most likely have a lasting impact, as it is still unclear what other major countries will do—emulate the US or create a trade network that isolates the US.

“Even if these tariffs are modified, even if the courts, up to the Supreme Court, will block some of them, we are facing a change of environment. As the Biden Administration did not abandon the tariffs introduced by the first Trump presidency, a different president in 2028 will not abandon tariffs. I think tariffs are likely to stay for a while,” DeLong says.

In the immediate term, the impact from tariffs is expected to be felt mostly by US consumers.

“Who’s paying for these tariffs? US consumers, for the most part. That’s exactly what we saw in 2018 and 2019 with the first round of tariffs. Almost all the cost was borne domestically. So yes, US consumers are going to feel it in higher prices. But you’ll also see trade volumes fall, which hurts both sides,” says Moody’s Duggar, adding that traditional counterpart China, along with other countries, will also be affected by the tariff increase.

If tariffs and economic uncertainty are weighing on the US economy, their effects are also being felt globally through spillover impacts. Most countries, however, see their economic growth slowing down.

“Tariffs are obviously an important impacting factor, and they operate mostly through slower growth in the US, which then obviously ripples out to slow growth in other places as well, particularly countries where there are tight trade links with the US, like Mexico and Canada in particular,” says Adam Slater, lead economist at Oxford Economics in London.

According to Slater, China is the country expected to slow down the most in 2025, and “here too you can see the impact of tariffs, among other factors, such as a weak domestic demand and the ongoing property sector problems.”

Two other major countries significantly affected by tariffs are India and Brazil, although the effects in each case are moving in opposite directions. “For India, we do not see much change, with growth at 6.5% this year and 6.6% next year. For Brazil, however, we anticipate a sharper slowdown—2.3% this year and 1.4% next year—but this is less about tariffs and more due to tight monetary policy,” Slater says.

Positive surprises could come from Europe, at least according to some.

“Europe will probably grow a little faster next year, partly because the uncertainty from tariffs has been eroded somewhat, and then you have the fiscal support coming from Germany, which should have its larger impact sometime next year,” says Alejandra Grindal, Chief Economist at Ned Davis Research.

If tariffs and uncertainty are negatively affecting economic growth, two other factors are supporting expansion. First, fiscal policies in the US, Germany, and China have been expansionary. The One Big Beautiful Bill Act, passed in May by the US Congress, thanks to the extension of tax cuts, is expansionary, as the CBO noted in August.

At the same time, the huge level of investment from US companies into AI is supporting US GDP growth. According to investment bank UBS, AI spending is expected to reach $375 billion this year and $500 billion in 2026.

According to Ricardo Reis, professor of economics at the London School of Economics, the economic outlook is a mixed bag. He said that US growth has been heavily sustained by a record level of AI investments and the renewed fiscal stimulus, while tariffs are having a negative impact.

“In Europe, growth is being held back by long-standing stagnation, a limited adoption of AI investments in comparison to the US, negative shocks from US trade policy, and the ongoing fallout from the Russia war. Prospects look dismal compared to other regions,” Reis says. “For emerging markets, the picture is more complex: tariff uncertainty reduces productivity across the board, but in the short run, it is also shifting where production is localized. The erratic nature of tariff policy makes it difficult to measure these effects … [but] on average, trade wars make everyone worse off.”

Faith In Fed Shaken

Tariffs are creating short-term uncertainty, but deeper questions cloud the longerterm outlook. Three issues stand out: Will the Federal Reserve remain independent under pressure from Trump, and how will that shape markets’ views on inflation, the dollar, and US Treasuries? How will Washington address its growing public debt? And will artificial intelligence deliver the productivity gains many hope for—or fall short?

Economists agree that central bank independence is paramount to safeguarding the stability of the US dollar and the creditworthiness of US Treasuries—two pillars of global financial markets.

Most economists agree that the appointment of Jerome Powell’s successor as chair of the Federal Reserve starting in May 2026 will be significant, and most of them favor current board member Christopher Waller. What markets do not want is a “yes man.” They would rather have an independent thinker.

“Christopher Waller is supposedly one of the top choices for federal governor next year. He is more on the dovish side, but he gives good reasons for it. He’s saying, Hey, I’m not doing it because of Trump. He did anticipate a bigger weakness in the labor market, and he truly believes that the spike from tariffs will just be transitory,” says Alejandra Gringer, chief economist at Ned Davis Research in Florida.

US’ Looming Debt Load

The high and growing level of the US debt is another important factor for future growth, not only in the US, because it is the cause for higher inflation and higher interest rates.

In May, Moody’s Ratings downgraded the US’ long-term issuer and senior unsecured ratings to Aa1 from Aaa, following similar downgrades from Standard and Poor’s in 2011 and Fitch in 2023, marking the first time all three have rated the US below their top tier.

Several administrations failed to correct the trend of growing US debt, and forecasts are worrying. “The federal deficit goes from 6.4% of GDP in 2024 to nearly 9% by 2035. Debt-to-GDP rises from 98% in 2024 to 134% in 2035. And federal interest payments are expected to rise from 18% of revenues in 2024 to 30% by 2035. That means in just 10 years, almost a third of the federal budget could go to interest payments alone,” says Moody’s Duggar.

The main problem is that future long-term inflation seems to be the only way out.

“I think that the growing debt in the US is very worrying, and is one of the main reasons, not the only one, but one of the main reasons why I expect the next five years to be a period of high inflation in the US,” says Reis.

The most likely impact is that bondholders are likely to be those who shoulder the payments, because there is no political will to increase taxes or reduce benefits.

The AI Wildcard

Moody’s Duggar warns that a potential risk for the US is the impact of the growing use of artificial intelligence on the job market, which already showed signs of weakness in the summer, along with huge downward revisions of prior job reports. More companies are announcing the adoption of AI technology across industries, raising the possibility of real consequences for the workforce. A study by MIT, published in July, showed that 95% of 300 organizations found that carrying GenAI investment resulted in zero return, despite an enterprise investment of $30 billion to $40 billion.

However, most economists believe that a long-term positive surprise can arise from a sharp increase in productivity, yielding tangible benefits for economic expansion.

Miami University’s Andolfatto says, “AI is just more potential productivity growth. I would never bet against the US economy. It’s always been one where the entrepreneurial spirit is alive and well. They are always delivering cost cuts, better ways of doing business.”