Monthly Outlook May

Analysis provided by Seerist's strategic partner Control Risks

We have identified the following key developments and trends to watch globally over the coming month.

This comes off the back of the US finally passing its military package on 24 April, which included USD 8.1bn for Taiwan and other Indo-Pacific allies. US President Joe Biden, Japanese Prime Minister Fumio Kishida, and Philippines President Ferdinand “Bongbong” Marcos Jr. on 11 April held the first ever trilateral summit where they agreed to strengthen military ties. The leaders also emphasised their concerns over China’s increasing influence in the South China Sea.

Governments from around the world are likely to emphasise the importance of countering China’s influence in the Indo-Pacific region, and beyond, during the Shangri-La Dialogue in Singapore between 31 May-2 June.

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MAY 2024

Global Outlook

Seven national and local elections will take place throughout May.

South Africa’s general elections on 29 May will see the ruling African National Congress (ANC) party meaningfully challenged for the first time since it took power in 1994. Nevertheless, it is likely to retain a slim majority or form a coalition with several smaller parties. Panama (5 May) and Dominican Republic (19 May) will also hold general elections. Chad on 6 May and Lithuania on 12 May will have presidential elections, with North Macedonia concurrently holding second round presidential and legislative elections on 8 May. The UK on 2 May will have mayoral elections in major urban areas, which will likely give an indication of political support ahead of the anticipated general election in Q4 2024.

The inaugural Global Supply Chain Forum, which will be held in Barbados on 21-24 May, will focus on supply chain resilience, climate change, and transport costs, as global supply chain disruption eases in the coming weeks.

The Panama Canal Authority on 15 April said it would ease drought-related restrictions on vessel traffic in mid-June, with the Panamanian wet season from May further increasing canal capacity. Elsewhere, major Red Sea shipping diversions around the Cape of Good Hope have stabilised and are unlikely to drastically changes in the coming weeks. However, sustained increased traffic at western Mediterranean ports may prompt burgeoning delays and higher inventory costs.

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Events to mark May Day (also known as Workers’ or Labour Day) on 1 May will see high turnout globally, driven by pro-Palestinian activism and continuing strained economic conditions.

Although Pro-Palestinian demonstrations have declined since October 2023, there will likely be an uptick for May Day. In the US, the UK and France, recent pro-Palestinian college campus sit-ins will likely persist for the coming days at least, although disruption beyond campuses will likely remain minimal. Protests will be largely peaceful, though some businesses may face incidental threats, especially at the periphery of major protests.

The 2024 World Health Assembly, to be held in Geneva (Switzerland) on 27 May, will likely face significant challenges in reaching an agreement on a global pandemic treaty.

So far over the past two years, there have been nine rounds of negotiations with no agreement. The WHO director-general in January said that momentum has been impacted by misinformation and conspiracy theories surrounding COVID-19. Geopolitical tensions are further undermining broader consensus. Sticking points also include access to vaccines and treatments in developing countries, and the financial costs of pandemic prevention measures.

Sources: “US Congress passes Ukraine aid after months of delay”, Reuters “Panama Canal restrictions set to ease as rains roll in”, Splash247 “Mediterranean ports warn of overflowing storage yards in latest threat to supply chain”, Financial Times “May Day 2024”, Unite the Union “The next pandemic is coming. Will we be ready?”, Financial Times “Unraveling the political threads: Inside South Africa's Complex Election Landscape”, AfricaNews Control Risks

In this outlook, Control Risks’ analysts share their views on key trends and events to monitor over the next month. This is not intended to be an exhaustive list but gives a selection of issues that our teams around the world feel are particularly relevant, interesting or important. To give feedback or suggestions on the outlook, please contact support@seerist.com.

The terrorism threat will remain elevated.

The terrorism threat will remain elevated during the Muslim holy month of Ramadan (approximately 10 March-9 April), Christian Easter religious holidays (29 March-6 April), and the Jewish holidays of Purim (23-24 March) and Passover (22-30 April). Ramadan typically coincides with an uptick in Islamist extremist attacks, often following exhortations from groups including Islamic State, al-Qaida and their affiliates. The Israel-Hamas conflict will likely further bolster intent by these groups to stage attacks. Local affiliates in sub-Saharan Africa, the Middle East and parts of Asia are the most likely actors to stage attacks during this period.

The Group of 7 (G7) foreign ministers on 17-19 April will meet in Capri (Italy) to discuss the conflicts in the Middle East and Europe, among other geopolitical issues.

The UN Security Council on 25 March passed a resolution calling for an immediate ceasefire in Gaza (with the US abstaining on an Israel-linked resolution for the first time since 2016), highlighting the mounting international pressure on Israel to end its military operations in Gaza. Meanwhile, missile and drone strikes in Ukraine and Russia will likely continue at an elevated rate in the coming weeks, with Kyiv and Moscow prioritising critical infrastructure targets.

Terrorism threats from Islamist extremists will likely remain elevated through April.

The Muslim holy month of Ramadan (until approximately 9 April) and the Christian Easter week (until 1 April) will likely continue to drive increased intent by Islamist extremists to mount attacks against religious places or public spaces, predominantly in the Middle East, Africa and parts of Asia. The potential expansion of Israeli military ground operations into Rafah (southern Gaza) will also likely drive increased intent to mount attacks against Western countries.

The IMF and World Bank on 15-20 April will discuss global financial concerns amid sustained high inflation and strained public finances at their annual Spring Meetings.

Our strategic partner Oxford Economics anticipates several central bank rate decreases from mid-2024, including in the US and UK. However, uncertainty will likely persist in the coming weeks. Debt restructuring will likely also be a critical topic. On 25 March, Zambia – the first country to default on its pandemic-related debt – was the first to successfully negotiate with its creditors under the G20 Common Framework. Ghana will attempt to follow suit through April.

The OPEC+ alliance of oil-exporting countries will most likely sustain production cuts beyond Q2 during a Joint Ministerial Monitoring Committee (JMMC) on 3 April.

In early March, the group agreed to sustain a voluntary cut of 2.2m barrels per day (bpd) through the end of Q2 – including a 1m bpd cut by Saudi Arabia. The cut extension is a continued effort to protect the price floor of USD 80 per barrel for alliance members in the face of downward pressure on oil prices from lower-than-expected economic demand in China and high oil production rates and exports by the US, Brazil, Guyana and Canada.