1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The report explores the application of Generative AI (GenAI) in tax and customs management for compliance risk analysis, aiming to enhance understanding of GenAI and provide guidelines for its implementation [13]. - GenAI has transformative potential for risk functions in tax and customs management, with the ability to revolutionize the relationship between analysts and technology [14]. - The future of GenAI likely involves integration into digital tools and management agent environments, with custom - tailored solutions emerging for professional fields [78]. 3. Summary by Relevant Catalogs II. Understanding Generative AI - GenAI is a type of AI that generates human - like content based on patterns learned from large amounts of data, using advanced machine - learning techniques [18]. - GenAI works by combining technologies for data processing and accessing pre - trained foundation models. It can be conceptually understood through input and parameters, foundation models, capabilities, and interactions [26]. III. Using GenAI for Compliance Risk Analysis Generalization and Understanding of Use Cases - GenAI use cases can be generalized beyond tax and customs administration, divided into four types based on subject - area expertise and autonomy: assistant AI, consultant AI, collaborative AI, and autonomous agent AI [30]. How AI Supports Compliance Risk Analysis - Deployment options for GenAI include commercial clouds, local deployments, and offline open - source options, accessible through APIs and SDKs [38]. - Analysts can access GenAI through tools like chatbots, virtual assistants, configurable agents, and it can be embedded in or replace traditional risk - analysis tools [39]. - GenAI can support risk analysis in four application scenarios: assistance, consultation, collaboration, and autonomous agent (replacement), consistent with compliance risk - management frameworks [40]. IV. Demonstration Using Managed Services - Three demonstrations are provided: natural - language research on the impact of a 25% currency devaluation on tax revenue and compliance; natural - language analysis of a large taxpayer's risk review; and natural - language analysis of distinguishing taxpayer risks [43]. V. Towards Local Applications - Most management agencies may choose local deployment configurations for GenAI to balance cost and security. An example of GenAI integration with the ASYCUDA system is presented, including interactions between AI agents [51]. VI. Operational Use Recommendation Guidelines - Understand when to use GenAI, considering its advantages and limitations, such as supporting open - ended research, using non - structured data, and enabling natural - language interaction [65]. - Clearly define human accountability for AI results, ensuring responsibility throughout the AI development and use process [69]. - Anticipate changes and prioritize employee training, including aspects like AI ethics, information security, and specific AI - tool usage [70]. - Build and protect a compliance information repository, which can enhance GenAI services through RAGs and fine - tuning [71]. - Adopt GenAI gradually and cautiously, starting with risk - assessed use cases and expanding for operational purposes while ensuring compliance with policies [77]. VII. Conclusion - GenAI can play multiple roles in compliance risk analysis, but human responsibility for its responsible use remains crucial. Its impact may be unbalanced globally, and future development will involve integration and customization [78].

Economic Data - The US GDP for Q2 2025 showed a seasonally adjusted annualized growth rate of +3.0%, exceeding expectations of +2.4%[17] - Personal Consumption Expenditures (PCE) increased by 0.4% month-on-month in June, with a year-on-year increase of 4.7%[19] - Non-farm payrolls added only 73,000 jobs in July, significantly below the expected 110,000, with prior months' data revised down by a total of 258,000 jobs[27] Market Trends - The S&P 500 index decreased by 2.36% to 6238.01, while the Nasdaq index fell by 2.17% to 20650.13[2] - The US 10-year Treasury yield dropped by 17 basis points to 4.23%, and the 2-year yield fell by 22 basis points to 3.69%[2] - The US dollar index rose by 1.04% to 98.6900, indicating a stronger dollar amidst economic uncertainty[2] Inflation and Employment - The unemployment rate increased to 4.25% in July, up from 4.11% in the previous month, while the U3 unemployment rate reflects a cooling labor market[29] - Core PCE inflation rose to 2.8% year-on-year, slightly above the expected 2.7%[23] - Job openings in June decreased to 7.437 million, with a vacancy rate of 4.4%, indicating a tightening labor market[25] Policy and Trade - President Trump announced a new tariff list affecting nearly 70 countries, raising concerns about potential inflationary pressures and trade negotiations with China[3] - The Federal Reserve's decision-making is complicated by the dual pressures of weakening economic data and ongoing tariff implications, with a 80% probability of a rate cut in September following the weak non-farm payroll data[11]

Core Insights - The report highlights that the Federal Reserve has maintained its current interest rate of 4.25%-4.50%, indicating a cautious approach amid economic uncertainties [10][32] - The U.S. economy shows signs of resilience despite a slowdown, with a robust labor market and a slight adjustment in GDP growth forecasts [10][11] - The ongoing geopolitical tensions, particularly in the Middle East, are contributing to rising inflationary pressures, prompting central banks to reassess their monetary policies [3][14] Major Asset Trends - U.S. Treasury yields have seen slight declines, with the 10-year yield at 4.38% and the 2-year yield at 3.90% [2] - The S&P 500 index has experienced a minor decrease of 0.15%, while the Nasdaq index increased by 0.21% [2] - Gold prices have dropped by 1.95%, while Brent crude oil prices have risen by 4.13% [2] Economic Data Summary - U.S. retail sales fell by 0.9% in May, with core retail sales also declining by 0.3% [18] - New housing starts in the U.S. were reported at 1.256 million units, below expectations of 1.357 million [18] - In the UK, inflation slightly decreased to 3.4%, while the Eurozone saw a rebound in construction output [24][26] Central Bank Actions - The Bank of England has kept its policy rate unchanged, but there are indications of potential rate cuts in August due to internal voting disagreements [11][12] - The Bank of Japan has also maintained its current policy stance, but is facing increasing inflationary pressures, leading to a planned reduction in bond purchases starting next year [13][28] Geopolitical Impact - The report notes that the escalation of the Israel-Iran conflict has led to increased oil prices and shipping costs, raising concerns about a potential "second inflation" scenario [14] - The report emphasizes the need for central banks to reevaluate their inflation outlooks in light of these geopolitical developments [14]

Investment Rating - The report does not explicitly provide an investment rating for the judicial system in Greece, but it suggests that enhancing judicial efficiency could lead to significant economic gains, indicating a positive outlook for potential investments in judicial reforms [6][63]. Core Insights - Greece's judicial system efficiency is among the lowest in the EU, adversely affecting economic performance. The crisis period led to a massive increase in demand for judiciary services due to business and personal insolvencies, which the supply of judicial services could not adequately meet [6][10]. - Policy simulations indicate that judicial reforms could yield substantial gains in investment and productivity, essential for fostering higher economic growth and resilience [10][63]. - The ongoing judicial reforms aim to address key imbalances, focusing on court reorganization, digitalization, and training, but require swift execution to achieve desired outcomes [10][64]. Summary by Sections A. Introduction - The new insolvency framework has reduced the non-performing loan (NPL) ratio from 40% in 2019 to 3% in 2024, but its implementation is hindered by an inefficient judicial system [11]. - Distressed debt amounted to around €70 billion at the end of 2024, representing approximately 30% of GDP [11]. B. Court System in Greece - The civil court system in Greece consists of three tiers: 57 courts of first instance, 19 courts of appeal, and the Supreme Court [16]. - There is a limited level of specialization in civil courts, with judges rotating every four years, which hampers the development of expertise in insolvency matters [19]. C. Judicial System Efficiency - Greece has one of the lowest judicial efficiency rates in the EU, with a clearance rate below 100% for civil and commercial cases, leading to significant backlogs [25]. - The average disposition time for civil and commercial cases in Greece is approximately 1,200 days, compared to the EU average of 446 days [25]. D. Drivers of Judicial Efficiency - Demand for judiciary services surged during the Global Financial Crisis (GFC) and the European Debt Crisis (EDC), leading to congestion in the system [30]. - The supply of judicial services has been declining, with inadequate human and financial resources contributing to low resolution rates [38]. E. Impact of Judicial Efficiency on Debt Enforcement and Insolvency Proceedings - Delays in obtaining court orders for debt enforcement can take several years, significantly impacting creditors [48]. - The new insolvency framework's implementation is challenged by procedural inefficiencies, particularly in corporate insolvency cases [50]. F. Impact of Judicial Efficiency on Economic Performance - Judicial efficiency affects economic performance through investment, productivity, and credit markets, with better contract enforcement linked to higher investment levels [51]. - Cross-country studies indicate that improved judicial efficiency correlates with increased foreign direct investment and enhanced firm productivity [53]. G. Conclusions and Policy Implications - Enhancing judicial efficiency is crucial for boosting economic performance, with ongoing reforms prioritizing court reorganization and digitalization [63]. - A multi-pronged approach is necessary to address both quantitative and qualitative aspects of judicial efficiency, including the establishment of commercial courts for specialized judges [64][66].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The productivity growth of the Greek economy has stagnated since the 2010 European Debt Crisis, with resource misallocation worsening particularly in non-tradable services and smaller firms [5][9][12] - Despite reforms in product market regulations, the impact on overall productivity has been mixed, indicating a need for accelerated regulatory reforms to enhance competition and business dynamism [9][31][32] Summary by Sections A. Background - Total factor productivity (TFP) in Greece has continued to decline since the European Debt Crisis, with a 9.7 percent growth in the euro area during the same period [10] - Resource misallocation has been identified as a significant issue, particularly affecting smaller firms and non-tradable service sectors [9][12] B. Resource Misallocation Analysis - Firm-level data from 2009 to 2020 indicates that resource misallocation has worsened, with significant disparities in marginal productivity across firms [19][22][23] - The analysis shows that resource misallocation has cost the Greek economy approximately 3 percent of market-economy-sector GDP annually between 2009 and 2020 [27] - Young firms, while more productive, have not expanded sufficiently to improve overall productivity due to constraints such as limited access to bank credit [29] C. Policy Recommendations - Accelerating regulatory reforms is crucial to improve resource allocation, especially in non-tradable service sectors [32] - The report suggests that labor market and capital market reforms can facilitate the growth of small and young firms, addressing issues such as low labor force participation and high non-performing loans [36] - It emphasizes the need for a systemic evaluation of existing regulations to reduce unnecessary costs and enhance competition [31][35]

Investment Rating - The report does not explicitly provide an investment rating for Thailand's debt ceiling or fiscal policies Core Insights - Thailand's public debt is approaching the ceiling of 70 percent of GDP, raising concerns about fiscal prudence and the adequacy of the current debt ceiling [4][12] - The analysis suggests that the debt limit for Thailand could be in the range of 77-87 percent of GDP, with a midpoint estimate of 82 percent [43] - The current debt ceiling is deemed broadly consistent with the estimated debt limit, but a larger safety margin is recommended to account for contingent liabilities and additional spending needs [46][48] Summary by Sections A. Introduction - Thailand's debt ceiling is set at 70 percent of GDP, raised from 60 percent in 2021 to accommodate COVID-19 related measures [13][14] - The fiscal framework aims to ensure fiscal responsibility and debt sustainability across various public sector entities [13] B. Assessing Thailand's Debt Ceiling - The report employs three approaches to estimate Thailand's debt limit: primary balance and debt dynamics, debt servicing capacity, and impact on growth [30] - The first approach estimates a debt limit range of 80-110 percent of GDP, while the second approach suggests a range of 82-100 percent of GDP based on debt servicing capacity [10][12][37] - The third approach indicates that growth-maximizing debt levels range from 31 to 77 percent of GDP [41] - The analysis concludes that the debt ceiling should be set below the estimated debt limit to provide a safety margin against macroeconomic shocks [45] C. Conclusions and Policy Implications - The report recommends refraining from raising the debt ceiling further and suggests fiscal consolidation to restore fiscal space [52] - It emphasizes the need for improved fiscal rules and transparency to avoid unexpected debt increases [54][55]

Investment Rating - The report does not explicitly provide an investment rating for the industry discussed Core Insights - Household sector over-indebtedness is a critical issue in Thailand, with the household debt-to-GDP ratio reaching 95.5 percent in 2021Q1 and remaining around 90 percent thereafter, indicating significant risks to financial stability and economic growth [10][11] - The report presents a comprehensive, multi-pronged approach to household deleveraging in Thailand, drawing on international case studies from Brazil, Hungary, Korea, and Malaysia to inform policy recommendations [4][53] Summary by Sections A. Introduction - The household debt in Thailand has been historically high, peaking at 85.9 percent of GDP in 2015 and increasing to 95.5 percent during the pandemic, with a significant share of unsecured loans [10][11] B. Thailand - The Thai government has implemented various measures to support household debt deleveraging, including broad-based assistance during the pandemic and debt restructuring programs [19][21] - As of 2024Q3, non-performing loan (NPL) ratios increased to 3.28 percent, with credit card loans having the highest NPL ratio at 4.61 percent [17][18] C. Brazil - Brazil's household debt surged during the pandemic, with the Debt Service-To-Income (DSTI) ratio peaking at 28 percent in March 2023, and over 40 percent of consumers defaulting on some form of debt [24][25] - The "Desenrola Brasil" program helped over 15 million people renegotiate R$52 billion in overdue debt, reducing the household DSTI ratio to 26.0 percent by June 2024 [28] D. Malaysia - Malaysia's household debt-to-GDP ratio increased from 66 percent in 2008 to 89 percent in 2015, prompting the central bank to implement measures to curb excessive indebtedness [29][30] - The introduction of tiered pricing on credit card interest rates and stricter credit card requirements helped moderate the growth of household debt [32][34] E. Korea - Korea experienced a credit card boom post-Asian financial crisis, leading to a peak in household debt at 62.5 percent of GDP by 2002, followed by significant policy measures to address the crisis [35][38] - The credit card delinquency ratio dropped to 2.6 percent in 2006 from above 10 percent in 2002-2003 due to effective debt restructuring programs [39] F. Hungary - Hungary's household debt peaked at 39.4 percent of GDP in 2010, with significant risks arising from foreign currency loans, leading to extensive state intervention in the banking sector [40][41] - The conversion of foreign currency loans into local currency and the introduction of debt cap regulations helped stabilize the financial situation [43][44] G. Other International Practices - Various international practices for debt rehabilitation and forgiveness are discussed, including the Individual Voluntary Arrangements in Hong Kong and the Personal Insolvency Act in Ireland [46][47] H. Conclusions and Policy Recommendations - A comprehensive approach to household deleveraging is necessary, combining ex-post measures to address existing debt and ex-ante policies to prevent new debt accumulation [53][54] - Emphasis on financial literacy, responsible lending practices, and regulatory measures is crucial to mitigate over-indebtedness risks [57][58]

Investment Rating - The report does not explicitly provide an investment rating for the industry analyzed Core Insights - The report introduces a novel framework called "Debt-at-Risk" to analyze risks surrounding public debt, indicating that global public debt could be approximately 20 percentage points higher than currently projected in severely adverse scenarios [6][12][26] - The framework employs a quantile panel regression to assess how macro-financial and political conditions impact future debt outcomes, highlighting pronounced variations in risks, especially in the upper tail of the distribution [6][12][16] - The analysis indicates that debt-at-risk is a key variable for predicting fiscal crises, outperforming other economic variables as a leading indicator [29][35] Summary by Sections Introduction - Global public debt exceeded $100 trillion in 2024 and is projected to approach 100% of global GDP by 2030, driven by major economies like China and the United States [15] - Rising trade tensions, tighter financial conditions, and spending pressures could exacerbate fiscal deficits and complicate the debt outlook [15][16] Methodology - The "debt-at-risk" framework builds on the "growth-at-risk" methodology and examines the dynamics of global debt distribution over a projection horizon of one to five years [17][18] - The empirical approach uses a location-scale model to estimate the predictive distribution of debt-to-GDP ratios, incorporating various financial, political, and economic variables [18][20] Results - Global debt-at-risk for 2027 is estimated at 117% of GDP, about 20 percentage points higher than previous projections [26] - For advanced economies, the three-year-ahead debt-at-risk in 2024 is estimated at about 131% of GDP, while for emerging markets, it is about 96% of GDP [27] - The report finds that adverse financial developments, such as tighter financial conditions and higher sovereign spreads, disproportionately affect the right tail of the future debt distribution [22][24] Extensions - The report evaluates the usefulness of debt-at-risk in predicting fiscal crises, finding it to be a robust predictor [29] - It expands the sample to include approximately 175 economies, quantifying upside risks to the debt outlook for nearly every economy [30] - The analysis identifies cross-country heterogeneity in debt-at-risk, influenced by initial debt levels and income status [31]

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The paper finds that stronger firm digitalization is associated with higher tax revenues across countries, with a one-standard-deviation increase in firm digitalization linked to an increase in tax revenues-to-GDP by up to 3 percentage points, conditional on the level of digitalization of tax administration (GovTech) [3][12][17] - Firm digitalization significantly improves tax compliance among high-risk taxpayers, such as small and informal enterprises, particularly in the service sector, indicating that digitalization broadens the corporate tax base and enhances compliance [3][12][14] - There is a significant synergy between firm digitalization and GovTech, underscoring the importance of promoting both to enhance tax collection [3][12][14] Summary by Sections Introduction - The benefits of government digitalization (GovTech) for tax collection have been well acknowledged, with empirical studies showing that digitalizing tax administration can enhance revenue collection significantly [9] - The relationship between firm digitalization and tax revenues remains largely unexplored, necessitating further research to understand its potential impact on tax collection [10][11] Literature Review - A long-standing literature documents benefits from firm digitalization, including higher growth and resilience to shocks, but the impact on tax revenues is less understood [16][18] - Policies to foster firm digitalization include upgrading internet infrastructure and promoting IT skills, which are essential for enhancing tax compliance [19] Empirical Analyses - The report employs both country-level and firm-level analyses to investigate the relationship between firm digitalization and tax revenues [21][22] - Country-level evidence shows that countries with stronger firm digitalization have higher tax revenues, with a strong positive correlation between business digitalization and tax revenues [23][28] - Firm-level evidence indicates that firm digitalization is associated with a higher probability of paying taxes and larger tax payments, particularly in emerging markets and developing economies [49][58] Conclusions - The findings suggest a dual approach of promoting both GovTech and firm digitalization to enhance tax revenues, highlighting that investments in digitalization will yield future tax revenue increases [14][15]

Investment Rating - The report does not explicitly provide an investment rating for the industry in Andorra, but it suggests the need for investments in higher value-added sectors to enhance growth potential [4][28]. Core Insights - Income in Andorra has stagnated over the last 50 years, with current levels slightly below those from 50 years ago, indicating a lack of growth compared to peer countries [4][9]. - The report highlights that Andorra is the only country among European comparators to have experienced a decline in GDP per capita over the past 50 years, contrasting sharply with the growth seen in countries like Malta and Cyprus [10][15]. - The findings emphasize the importance of creating a conducive environment for investment and productivity to drive income growth in Andorra [4][28]. Summary by Sections A. Income Stagnation - Andorra's income has stagnated since the 1970s, with GDP per capita growth barely matching population growth, leading to stagnation [9][13]. - The country has seen a decline in GDP per capita, unlike peers such as Malta and Cyprus, which have experienced significant income growth due to economic diversification and productivity gains [10][15]. B. Economic Sectors and Productivity - The growth in Andorra has been dominated by low value-added sectors, particularly tourism and real estate, while the financial sector's contribution has halved since the 2015 banking crisis [17][20]. - The limited expansion of new businesses, especially in higher value-added sectors like ICT, has been identified as a constraint to economic growth [20][22]. C. Future Directions for Growth - The report suggests that removing structural bottlenecks and diversifying the economy are crucial for improving GDP per capita in Andorra [28][29]. - Recommendations include enhancing the business environment, addressing housing issues, and attracting talent, particularly in ICT [29][30].