optimistic, yet risks remain two-sided. On the consolidation. A sharp repricing of sovereign risk could lead to wider market turbulence. Hedge upside, the A.1. boom can be a source of strength sovereign bond markets. Box 2 analyses the productivity. In the US, the economy will also benefit from tax cuts and extensive deregulation. uncertainty, the global economy also faced In APAC, regional economies defied earlier expectations of a sharp tariff-induced slowdown, Middle East, the A.1. investment boom, evolving markets. Notably, concerted monetary easing supported domestic demand and equity markets. The ongoing A.1. boom has helped lift the global performance of tech exports, delayed rollout of economy, but has also triggered additional US reciprocal tariffs, and efforts to diversify trade, had all combined to lift the region's exports. concerns. Tech firms have increasingly turned to debt financing instead of relying on cash flows. the downward pressure on exports to the US, it not materialise, then some tech firms may was in fact shipments to the rest of the world, including to other Asian markets, that accounted private credit markets. There is also a risk of diversify their trading partners (Chart 2.2). circular financing within the A.1. ecosystem. Geopolitical risks remain elevated, given the split officers, the US capture of Venezuelan President surrounding a US takeover of Greenland, and the monetary policy paths across multiple regions. Energy-importing economies, particularly in Europe and Asia, faced greater exposure to these Finally, major advanced economies continued to face fiscal sustainability risks, given higher