India expected to overtake Germany
Despite downturns and stagnation, Germany remains the world’s third largest economy for the third year running, according to a new study. But India is expected to jump ahead by the end of the decade.
Although we’ve heard doom and gloom about Germany’s faltering economy of late, it’s still ranks among the world’s largest.
With a gross domestic product (GDP) totalling around $5.1 trillion in 2025, Germany maintains its third place in the list of the world’s largest economies, according to a recent study by the German Economic Institute (IW).
The US leads the ranking with a GDP total of $30.8 trillion reported in 2025, followed by China with $19.5 trillion.
Tokyo protests as China blocks ‘dual-use’ exports
Japan has strongly protested China’s move to restrict the export of “dual-use” items to 20 Japanese business entities that Beijing says could be used for military purposes, in the latest twist in a months-long diplomatic row between the two countries.
Japanese Deputy Chief Cabinet Secretary Sato Kei said at a news conference that the move by China’s Ministry of Commerce on Tuesday was “deplorable” and would “not be tolerated” by Tokyo.
Companies affected by China’s export ban on dual-use items, or items that can be used for civilian or military purposes, include Mitsubishi Heavy Industries’ shipbuilding group, aerospace and marine machinery subsidiaries, Kawasaki Heavy Industries, Japan’s National Defense Academy, and the Japan Aerospace Exploration Agency.
Beijing said restricting the export of dual-use items to the Japanese firms was necessary to “safeguard national security and interests and fulfil international obligations such as non-proliferation”, adding that the companies were involved in “enhancing Japan’s military strength”.
China’s Commerce Ministry said on Tuesday that it would also add another 20 entities to its export restrictions watchlist, including Japanese automaker Subaru, petroleum company ENEOS Corporation, and Mitsubishi Materials Corporation.
Chinese exporters must submit a risk assessment report for each company to ensure “dual-use items will not be used for any purpose that would enhance Japan’s military strength”, according to a statement on the Commerce Ministry’s website.
China has imposed similar restrictions on the US and Taiwan as a form of political protest, particularly over Washington’s ongoing unofficial support for the self-governed island. Beijing claims democratic Taiwan as its territory and has not ruled out using force for “reunification”.
Tokyo and Beijing have a historically acrimonious relationship, but diplomatic ties took a turn for the worse in November, when Japanese Prime Minister Sanae Takaichi told legislators that a Chinese attack on Taiwan would constitute a “survival-threatening situation” for Japan, which could necessitate military action.
Takaichi’s remarks were some of the most explicit regarding whether Japan could become involved in a conflict in the Taiwan Strait, and have been accompanied by a push to expand Japan’s military capability.
Beijing reacted with fury to Takaichi’s remarks, discouraging Chinese citizens from visiting Japan, leading to a major drop in tourism revenue from Chinese visitors.
Analysts: US-Indonesia deal threatens China’s ‘entrenched position’ in nickel market
China will accelerate investment in alternative nickel supply sources and strengthen its role across the metal’s wider supply chain, analysts said, after the United States finalised a deal with Indonesia on Thursday that will give America unrestricted access to the country’s industrial commodities.
While the US Supreme Court’s tariff ruling last week could add some uncertainty to US-Indonesia trade, the agreement has the potential to reshape the global supply chain for nickel – a metal used to make stainless steel and some electric vehicle batteries.
“[The US-Indonesia deal] is quite important and China will not like it,” said Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at Natixis. “China does have leverage through its big stake in Indonesian nickel mines and could try to retaliate by slowing tech transfers or pulling back investment.”
Indonesia has emerged as a decisive player in the nickel market in recent years, accounting for more than 60 percent of global mine supply for the metal, according to a Goldman Sachs article published last week.
Chinese investment has supported Indonesia’s expansion in nickel processing capacity, reinforcing the nation’s growing influence on the market, the article added.
The recent rally in global nickel prices – which saw the price of the base metal jump more than 30 percent between mid-December and January – was largely driven by Indonesia’s decision to restrict how much ore could be mined, Goldman Sachs said.
“Now Indonesia’s supply decisions are the lever the market is watching,” said Lavinia Forcellese, a commodities analyst with Goldman Sachs Research. “And relatively small changes in policy or approvals can have an outsize impact on global balances and prices.”
China has established an “entrenched position” in Indonesia’s nickel industry in recent years, but that position could be complicated by the country’s new deal with the US, analysts said.
Under the agreement, mineral processing and smelting projects that involve Chinese technology, equipment sourced from China, or entities with Chinese ownership may fail to meet compliance standards in the future, making it harder for Chinese firms to expand their investments, Beijing law firm Jingtian & Gongcheng said in a February article.
Genevieve Donnellon-May, a fellow at the Pacific Forum, said the deal could “dilute China’s preferential access” to Indonesia’s nickel supply, “divert nickel flows towards US-linked supply chains and intensify competition for influence”.
“This may accelerate supply chain challenges, pushing Beijing to seek alternative sources or reinforce control over existing investments,” she said.
Saudi Arabia, UAE, Malaysia lead Islamic fintech
Saudi Arabia, Malaysia and the UAE are leading global Islamic fintech development as transaction volumes are projected to reach $341 billion by 2029, according to a new industry report.
The Global Islamic Fintech Report 2025/26, produced by DinarStandard and Elipses, said the three countries ranked among the most conducive ecosystems globally under the Global Islamic Fintech Index, which evaluates talent, regulation, and infrastructure, as well as market maturity and capital availability.
The report highlighted how Gulf Cooperation Council economies are accelerating efforts to position the region as a hub for Shariah-compliant digital financial services.
Global Islamic fintech transaction volumes were estimated at $198 billion in 2024/25 and are expected to expand at an annual rate of 11.5 percent through 2029, slightly outpacing the broader fintech industry, which is projected to grow at around 11 percent annually over the same period.
Huzayfa Patel, digital assets and fintech development at the Qatar Financial Center, said: “Over the last decade, fintech has moved into the mainstream of financial services and consumer behavior. The fintech market revenue is projected to grow fivefold to $1.5 trillion by 2030, with growth driven in part by digital access expanding faster than traditional offerings.”
He added that Islamic fintech is expanding alongside rising demand for ethical and Shariah-compliant financial products.
The sector now includes 484 Islamic fintech firms worldwide, with 30 companies identified as notable players based on innovation, funding activity and geographic expansion strategies. Industry experts cited access to capital, regulatory compliance requirements, limited customer education and high customer acquisition costs among the main barriers to growth.
The report identified Saudi Arabia, Iran, Malaysia, and the UAE, in the top 10 countries by Islamic fintech transaction volume, alongside Indonesia, Kuwait, and Turkiye, as well as Bangladesh, Pakistan and Qatar.
Najmul Haque Kawsar, senior consultant at DinarStandard, said Saudi Arabia has introduced national infrastructure to enable regulated real estate tokenization and digital ownership transfers, highlighting the Kingdom’s push to expand digital financial services.
“In a region where property is culturally and economically central, the narrative is easy to explain: fractional exposure to property-linked cashflows, without pretending that bricks and mortar are suddenly frictionless,” he said.
Digital assets are also emerging as the next frontier of Islamic finance. Daniel Ahmed, co-founder and chief operating officer of digital asset platform Fasset, said public discussions around Islamic finance, cryptocurrencies and blockchain have often focused narrowly on whether crypto is halal.
“While understandable, this framing is incomplete. It treats digital assets as a monolithic product rather than as what they truly are: a neutral financial infrastructure,” he said.
Ahmed added: “A more meaningful and intellectually honest question is not whether digital assets are permissible by default, but whether they can be designed and governed to fulfil the Maqasid Al-Shariah, the higher objectives of Islamic law.”
The report said practical use cases are increasingly centered on stablecoins and central bank digital currencies for settlement, tokenization for distributing real-world assets, and embedding Shariah governance frameworks into digital financial systems.
Stablecoins had a combined market capitalization of about $317 billion in early 2026, making them an increasingly important settlement mechanism, while tokenized real-world assets remained relatively small at around $4.31 billion.
The region is also witnessing growing regulatory momentum. In Abu Dhabi, the FIDA cluster — covering fintech, insurance, digital and alternative assets — aims to build institutional-grade digital asset infrastructure under regulatory supervision.
Japan is making economic addiction great again?
Déjà vu abounds in Tokyo. Markets are celebrating a Japanese prime minister dusting off the same-old-same-old economic policies as if something new and exciting is afoot.
Prime Minister Sanae Takaichi is indeed unleashing a powerful wave of excitement. This is despite her pledging the same tired policies her party has pursued for two-plus decades. And to work the magic that none of her predecessors could. This includes her mentor, 2012-2020 Prime Minister Shinzo Abe.
Abe himself was a protege of the most impactful Japanese reformer of recent decades — 2001 to 2006 Prime Minister Junichiro Koizumi. He privatized the sprawling Japan Post, which ran the nation’s biggest savings bank, and oversaw the cleanup of bank balance sheets.
When Koizumi stepped aside in 2006, he passed the baton to Abe. It did not go well. After 12 mediocre and scandal-plagued months, Abe was shown the door. Six-plus years later, he returned to power as an economic game-changer.
Abe hit the ground running in December 2012 with bold plans for the supply-side revolution Japan desperately needed. He pledged to cut red tape, make labor markets more meritocratic, catalyze a startup boom, empower women and reclaim Tokyo’s place at the center of global finance from China.
Yet after nearly eight years in power, Abe achieved none of those goals. Instead, he reopened the fiscal floodgates and pressured the Bank of Japan to supersize its quantitative easing program and weaken the yen. In other words, he fed Japan’s addiction to runaway borrowing and free money, just as Takaichi is now.
Abe did have one notable success: prodding companies to tighten governance. While that drove the Nikkei 225 Average to all-time highs, it didn’t drive corporate chieftains to share the wealth with workers. In 2025, as the Nikkei was topping 50,000, real wages fell in all 12 months of the year.