The European Union reached a preliminary deal on Monday to nearly halve imports of steel and ​impose tariffs of 50% on excess ​shipments ⁠to protect the bloc’s steel industry from overproduction elsewhere.

EU steel producers are operating at only 65% capacity due to rising imports and 50% tariffs imposed by U.S. President Donald Trump. The new measures are designed to push capacity utilization up to 80%.

Representatives for the European Parliament and the Council, the body representing EU governments, agreed late on Monday to limit tariff-free imports to 18.3 million metric tons per ⁠year, a ⁠47% cut compared to 2024, with a doubling of the out-of-quota duties.

Last year, the main sources of steel imports into the EU were Türkiye, South Korea, Indonesia, China, India, Ukraine, and Taiwan.

EU steel is currently protected by safeguards, put in place during Trump’s first term, with import quotas and 25% tariffs above those limits. However, under World ⁠Trade Organization (WTO) rules, they must expire after eight years – on June 30.

The European Commission, which proposed new measures in October, said the EU ​steel sector has lost some 100,000 jobs since 2008 and output ​would decline even further without extended restrictions.

The new measures will take more into account where imported steel was ⁠originally ‌melted ‌and poured to avoid circumvention and be regularly ⁠reviewed to ensure they are ‌effective.

The parties also committed to phase-out imports of steel from Russia swiftly, ​possibly by September 2028. ⁠Some 3.7 million tons of steel slabs ⁠came from Russia to the EU last year.

The parliament and ⁠Council will need ​to vote on Monday’s agreement for the measures to enter force.

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International real estate investors are seeking alternative routes for “risk diversification” and to “create a Plan B” in the wake of the conflict between the U.S.-Israel and Iran, with Türkiye standing out among these options, according to a report on Tuesday.

It has now been around one-and-a-half months since the conflict erupted, turning into a regional tension following U.S. and Israeli attacks on Iran and Tehran’s retaliations.

Dubai – ranking high among the locations where Turkish citizens purchase the most property – continues to be negatively affected by the Middle East crisis. Accordingly, the spread of attacks between the U.S., Israel and Iran to other regional countries has led to a drop in property sales in Dubai, which had become a focal point for international investors.

According to the digital platform DXB Interact, which provides data on the real estate market in Dubai, property sales dropped from 17,027 units (between Feb. 2 and March 1) to 11,828 in the four weeks after the conflict began (March 2-29). Thus, the initial decline in sales of 25% rose to 30.5% over the course of a month.

The transaction volume also dropped by 36% in one month, falling from $16.53 billion to $10.58 billion, according to the report by Anadolu Agency (AA), citing platform data.

Moreover, industry representatives suggest that international real estate investors are seeking alternative routes for “risk diversification” and “Plan B” because of the war.

Decline in prices

International real estate expert and CEO of Level Immigration and Properties, Haitham Ahmet Alamarioğlu, said they expect the decline in property sales in Dubai to continue in the short and medium term. He stated that without a permanent cease-fire, international investors would remain in a wait-and-see position.

“Without a permanent cease-fire, trust will not return, and transaction volumes will not recover without trust,” Alamarioğlu said.

“In such scenarios, having a Plan B shifts from precaution to necessity. Historically, it has taken at least 12-18 months for geo-politically triggered corrections in Dubai to reverse. This time, it might take even longer,” he added.

Additionally, Alamarioğlu stated that early data indicate a 4%-5% drop in prices, adding, however, that the main pressure “hasn’t been fully felt yet.”

“When transaction volumes fall, prices react with a delay. Sellers first resist lowering prices, the market freezes, then the correction comes. A more pronounced correction in the next quarter is highly likely.”

3 main alternative routes

Still, Alamarioğlu remarked that Dubai’s story isn’t over, but argued that its “safe haven” narrative took a significant hit.

“Dubai partially lost its appeal. There’s no sudden exodus, but a gradual rebalancing. Investors are now asking, ‘If I need to exit this market tomorrow, what’s my Plan B if I can’t quickly sell my property and my capital gets stuck here for my family?'”

He went on to say that Türkiye, Greece and Panama are standing out as three alternative destinations for international property investors.

He noted a significant increase in demand from Iranian and Gulf-based buyers in Türkiye, which he tied to its “citizenship by investment” program.

“This is driven by visa-free entry, cultural proximity, and it being one of the rare accessible ways to obtain full citizenship through property acquisition,” he noted.

He also mentioned the Golden Visa program in Greece, as well as the “qualified investor program” in Panama, which grants permanent residence in 30 days.

Özden Çimen, international real estate expert and CEO of Parcel Estates, also stated that recent developments in the Middle East have put investors in a “wait-and-see” mode, and there hasn’t been panic selling yet.

Çimen said that Dubai’s zero income tax, high rental yields, secure regulatory environment, and high liquidity still attract investor interest. She also mentioned the recent rise in the Dubai Financial Market Real Estate Index, which tracks real estate company shares, after the cease-fire talks.

Çimen conveyed that Dubai hasn’t lost its allure, but suggested that international investors are diversifying geographically.

“Recently, investors have been considering locations like London, Lisbon, Istanbul, Miami and Barcelona as additional portfolio destinations. We can view this as a risk diversification strategy.”

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Disinflation in Türkiye continues across all subgroups, albeit at varying speeds, the central bank’s chief said on Monday, according to the text of a presentation made in New York.

Annual inflation declined to 30.9% in March despite the pricing pressures from the fallout of the Iran war. Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan said underlying trend of inflation also eased last month.

In the presentation to investors in the U.S., Karahan said the disinflation process was supported by a reduced rigidity in rent and education prices, an effect he said was expected to continue throughout the year.

The U.S.-Israeli war on Iran has damaged Gulf energy production, stranded tanker traffic in the key Strait of Hormuz and boosted oil prices in the world’s worst energy shock.

That came as a major test for countries that import most of their energy needs, including Türkiye.

Turkish authorities have taken steps to cushion the fallout of the war on domestic markets. Officials said they were prepared for more steps if the two-week cease-fire, announced last week, does not ​hold.

The CBRT has already halted its easing cycle at 37%, lifted its overnight rate by ​about 300 basis points to near 40% and announced steps to support liquidity in the domestic markets.

Bankers on Monday estimated that the central bank bought $13 billion in foreign exchange last week in a reversal since the Iran war began, and total reserves rose by some $9 billion to $171 billion.

Net reserves are estimated to have increased by $10 billion last week to $55 billion, bankers said, citing calculations based on data.

Karahan said declining gold prices have contributed to easing household demand for foreign currency, while international reserves are currently stronger compared to previous periods of capital outflows.

Meanwhile, Turkish authorities last month reintroduced a system that adjusts the special consumption ​tax (ÖTV) on fuel products and prevents higher oil prices from being fully passed through to consumers.

Karahan said the mechanism, called the “sliding-scale” system, has helped limit inflationary pressures.

The presentation also showed that the governor said demand indicators pointed to a slowdown in Türkiye’s economic activity.

Capacity utilization remains weak, he said, and demand-side indicators suggest moderating growth. Survey-based data also confirm the slowdown, while credit growth decelerated in the first quarter.

On external balances, Karahan stated that the current account deficit, shaped largely by energy imports and tourism revenues, remains below historical averages.

Official data on Monday showed Türkiye’s current account balance registered a deficit of $7.5 billion in February, in line with market expectations.

The figure lifted the January-February deficit to $14.54 billion.

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Investors are buoyed by a political change in Hungary and are banking on a positive new chapter for the Central European nation as incoming Prime Minister Peter Magyar insists there is no ​time to waste following his resounding defeat of Viktor Orban – provided he can stick to his plans.

Magyar’s landslide win gives his center-right Tisza party the chance to change the judicial, electoral, public tendering and media control laws that ⁠were at the heart of Orban’s fractious relationship with Brussels and ⁠led to around 18 billion euros ($21.2 billion) of EU funding being withheld.

During a marathon post-victory press conference, Magyar, who wants to use the money to boost the economy, pledged to carry out sweeping reforms, join the European Public Prosecutor’s Office, set a two-term limit for prime ​ministers and unblock a 90 billion euro EU loan for Ukraine.

For economists, the implications are obvious – the unfreezing of ​EU ⁠funds alone, which amount to some 8% of Hungary’s annual gross domestic product (GDP) – could add 1-1.5 percentage points to its growth, Morgan Stanley estimates.

For international investors, who can pick and choose where they put their money, that and the broader change in mood music would be a significant lift.

“It’s a new chapter for Hungary, and it’s a great opportunity,” PGIM’s head of emerging market macro research, Magdalena Polan, said about the change of government.

“To move the economy will not take much because sentiment and rule of law are such an important part of the economic set of factors that impact growth.”

Analysts at JPMorgan expect a reset in relations with the EU to take place almost immediately and say early commitments to reform are likely to be enough to start unlocking the frozen EU money.

EU Commission President Ursula von der Leyen hailed Magyar’s win as “a victory for fundamental freedoms,” comparing the ousting of nationalist Orban to Hungary’s 1956 anti-Soviet uprising and its 1989 break with communism.

Although the mid-year deadline for Budapest to absorb the EU’s post-COVID Recovery and Resilience Facility (RRF) funds looks too tight ⁠on ⁠the face of it, JPMorgan also believes the “extraordinary circumstances will call for exceptional flexibility” from the EU.

Skeletons in the coffers

The election result sent Hungary’s forint surging to its best level against the euro in four years, while 10-year Hungarian government borrowing costs fell by half a percentage point to their lowest since 2024, and the stock market gained almost 5%.

Once the initial excitement settles, though, investors will want to see what Tisza says about state finances after they have had a proper look at the books.

Hungary currently has one of the EU’s largest budget deficits at over 5% of GDP. Its debt-to-GDP ratio is above 70% and rising, and credit rating agency S&P Global has the country just one downgrade away from “junk” status.

Magyar has said he hopes stronger growth and an improvement in sentiment that lowers the government’s borrowing costs further will help the situation. He also vowed to stamp ⁠out corruption, end “prestige” investment projects and halt overpriced public procurement.

“I’m sure they will find some skeletons,” Aberdeen EM debt portfolio manager Viktor Szabo said, referring to Tisza’s audit of the finances, although he also expects S&P to stabilize Hungary’s credit rating given the likely unfreezing of EU funds.

The other key to-dos on the new government’s list will be a credible medium-term budget ​plan, Szabo said. One needs to be presented to the European Commission by October, but an outline of the plan and some ad-hoc measures might be ​required well before then.

New beginnings, old realities

Euro adoption is also on the agenda, even if still years away.

It was a key pledge of Magyar’s election campaign, and Tisza’s supermajority should allow it to push through all the required constitutional changes.

Still, Deutsche Bank analysts say the country’s “fiscal and debt ⁠dynamics remain incompatible with ‌Maastricht criteria at the ‌moment,” given a eurozone entry requirement to have a sub 3% of GDP budget deficit and ⁠a debt-to-GDP level of 60% or lower, or at least reducing towards it.

Hungary’s 3% (+/-1pps) inflation target ‌also needs to be brought in line with the “close-but-below” 2% preferred level of the European Central Bank (ECB), they said.

PGIM’s Polan also sees some broader economic and political realities remaining in place.

A sudden disbursal ​of EU funding before reforms are cemented could leave ⁠Brussels open to legal challenges from other potentially unhappy member countries.

Hungarian companies, meanwhile, are running into a labor shortage made ⁠worse by an aging population, language barriers and their approach to immigration. Living standard improvements haven’t kept up with some of its neighbors either, and ⁠ending reliance on Russian gas looks even ​harder for now, given the Middle East conflict.

Nevertheless, the departure of Orban means much is about to change, and most likely for the better for many investors.

“We are in a completely new situation here,” Polan said.

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The International Monetary Fund (IMF) slashed its 2026 global growth projection Tuesday, as expected, warning that the world economy could be “thrown off course” by war in the Middle East, which hit commodity markets and sparked higher prices.

The global economy is set to grow by 3.1% this year, said the International Monetary Fund in its World Economic Outlook report, released during its spring meetings in Washington.

This is down from a 3.3% forecast in January before hostilities erupted as U.S.-Israeli strikes against Iran started on Feb. 28, prompting Tehran’s retaliation and sparking a broader conflict in the region.

“We were planning to upgrade growth for 2026 to 3.4%” if not for the war, IMF chief economist Pierre-Olivier Gourinchas told Agence France-Presse (AFP).

Prices of oil, gas and fertilizers have surged due to the conflict, as Iran virtually blocked traffic through the Strait of Hormuz, a key waterway for shipments. U.S. President Donald Trump has also ordered a naval blockade around Iran’s ports.

Higher inflation

The fund expects higher inflation this year at 4.4%, 0.6 percentage points above its January forecast.

After this, the “disinflation path” of the past few years should reassert itself, Gourinchas said.

But these projections assume a relatively short-lived conflict with temporary energy market disruptions.

“We have to be very concerned about the potential for this to become a major energy crisis,” he warned.

In more adverse scenarios where energy prices remain steep for the year, global growth could slow to 2.5% or even to around 2.0%.

“Since 1980, it’s basically been four times when growth has been at two percent or below,” said Gourinchas.

These included periods such as the 2008 global financial crisis and the COVID-19 pandemic.

“This latest shock comes less than a year since the shift in U.S. trade policies, and the transition to a new international trade system is still ongoing,” the IMF said.

A year ago, Trump unleashed sweeping tariffs on U.S. trading partners, rocking financial markets and snarling supply chains.

A swath of these tariffs has been struck down by the Supreme Court, but uncertainty lingers as Trump moves to reimpose duties via other means.

Uneven impact

Although overall revisions to global growth and inflation appear modest, the IMF cautioned that the war has taken a bigger toll on the Middle East and “vulnerable economies” elsewhere.

“The impact on emerging market and developing economies would be almost twice that on advanced economies,” the fund said.

Higher energy and fertilizer costs could bring steeper food costs, mainly hitting low-income energy importers, Gourinchas said.

Growth projections this year for the Middle East and central Asia were cut by around half to 1.9%.

Saudi Arabia, the Middle East’s biggest economy, is set to see 3.1% growth this year, down 1.4 percentage points from January’s expectation.

Among the world’s two biggest economies, U.S. growth is still set to accelerate to 2.3% this year, although the pace of growth was revised slightly lower.

“The U.S. at the margin is benefiting from higher energy prices,” Gourinchas said. But gasoline prices have also jumped for consumers.

China’s growth is anticipated to cool to 4.4%, a touch below the January forecast, too.

The IMF flagged an underlying “unevenness” in both economies.

Domestic activity lags behind exports in China, while a strong showing in the United States has been accompanied by low employment growth.

Euro area growth was revised 0.2 percentage points down to 1.1% for 2026.

U.K. growth saw a bigger downshift by 0.5 percentage points, to 0.8% this year.

While the IMF does not expect inflation expectations to go off-track, there is concern that they may not be as well-anchored as before.

Past inflation episodes remain fresh in the public’s minds, and firms might act to restore margins more quickly than before.

“If that happens, then you can get much more persistent inflation going on, that would be reflected in higher inflation expectations,” Gourinchas said.

If so, central banks might need to step in and raise interest rates to cool the economy, despite the ongoing negative supply shock.

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China’s exports slowed down sharply ​in March as the war in the Middle East led to a rise in energy and transportation costs, hurting global demand and exposing the risks in Beijing’s strategy of leaning on manufacturing to sustain growth.

The world’s ⁠second-largest economy surged into 2026 on red-hot AI-fuelled electronics demand, raising ⁠expectations it could eclipse last year’s $1.2 trillion record trade surplus.

But the conflict has disrupted global growth, leaving China especially vulnerable as it has relied on foreign demand to offset a prolonged inability to revive consumption at home.

Outbound shipments grew by ​just 2.5% in March, customs data showed on Tuesday, a five-month low, and far below the ​21.8% surge ⁠seen over the January-February period. Economists had forecast growth of 8.3% in a Reuters poll.

“Export growth to major destinations slowed across the board,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, attributing the drop to global uncertainty over the Iran war.

“I think China’s trade surplus will shrink this year, as China cannot pass through the higher energy prices completely to foreign consumers,” he added.

The signs are already evident: China’s March trade surplus came in at just $51.13 billion, far below expectations of $108 billion.

Surge in imports

A sharp 27.8% surge in imports – the strongest since November 2021 – weighed on the balance. That compared with a 19.8% increase in January-February and forecasts for 11.2% growth.

China’s status as the world’s largest manufacturer and energy importer leaves it acutely exposed to a global energy shock. Diversified supplies and large oil reserves offer some protection, but uncertainty over the conflict’s duration risks undermining artificial intelligence-fuelled demand for chips and servers, blurring the growth picture.

Even China, long criticized by trading partners for subsidy-backed, cut-price manufacturing, ⁠is ⁠not insulated from the hit to buyers’ purchasing power as fuel and transport costs rise.

Separate gross domestic product (GDP) data due on Thursday is expected to show the $19 trillion economy regaining some momentum in the first quarter, but full-year growth is set to slow to 4.6% from last year’s 5.0%, broadly in line with the official target of 4.5%-5.0%.

Chinese goods more competitive?

Chinese goods will be “even more competitive” as the energy shock “pushes up the price in most of the countries” more than in China, said Chen Bo, senior research fellow at the National University of Singapore’s East Asian Institute.

Chen expects global demand for Chinese-made electric vehicles to increase.

Fred Neumann, HSBC’s chief Asia economist, said China could stand to benefit from taking the decision in the early 2000s to stockpile commodities, as it could help blunt the impact ⁠of raw-material shocks on factory gate prices.

China’s exports of refined oil products rose 20.5% month-on-month, totalling 4.6 million metric tons.

Disruptions to global energy supply lines will be felt in China, even if it’s not yet showing up in the data.

Natural gas imports for March dropped by an annual 10.7%, the lowest level since October 2022, ​with Chinese ships diverting between eight and 10 cargoes over the course of the month to sell where prices are higher, according to ICIS, ​Kpler and Vortexa data.

Crude oil imports also fell 2.8% year-on-year, but this was predominantly due to a high base effect, with March arrivals having been loaded onto ships before the war began.

The figures were further muddied by the seasonal effects of a ⁠late Lunar New Year ‌national holiday, ‌said Xu Tianchen, senior economist at the Economist Intelligence Unit, during which factories shut as workers down ⁠tools to celebrate.

“This explains the decline across the low-value-added sectors, textiles, garments, bags, toys, ‌furniture, as they are reliant on migrant workers,” Xu said.

A high base is also a drag, after Chinese factories rushed shipments a year earlier to beat U.S. President ​Donald Trump’s April 2 “Liberation Day” tariff deadline.

March factory activity ⁠data out of China showed goods exports continued to support growth, but the war in Iran ⁠weighed on sentiment as commodity prices rose sharply, lifting input costs.

Some analysts expect sustained tech demand to underpin Chinese exports.

“For Q1 as a whole, ⁠export growth rose to its ​highest level in four years,” said Zichun Huang, China economist at Capital Economics.

“Despite the energy price shock, exports should stay solid in the coming quarters, thanks to strong demand for semiconductors and green technologies.”

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