Fiscal Overview - In FY 2026, the weighted average fiscal expenditure of major global economies is projected to increase from 33.2% of GDP in FY 2025 to 33.5%[6] - The deficit rate is expected to rise from 5.7% in FY 2025 to 6.0% in FY 2026, indicating a further expansion of fiscal policies[6] Economic Differentiation - Countries like China, the US, Eurozone, Japan, and South Korea will see an increase in fiscal expenditure as a percentage of GDP, while the UK, Canada, Australia, and Russia will experience a decrease[10] - The US will implement significant tax cuts under the "Great American Act," reducing fiscal revenue as a percentage of GDP, while other economies are expected to enhance fiscal revenue efforts[11] Investment Focus - Most economies are prioritizing fiscal investment in military and emerging industries, with the US increasing military and homeland security spending in FY 2026[12] - The Eurozone will boost defense spending, while Japan will introduce new defense-related taxes to support its military budget[12] Country-Specific Insights - **United States**: Fiscal expenditure is projected to rise from 22.8% of GDP in FY 2025 to 23.3% in FY 2026, despite tax cuts[23] - **Eurozone**: Fiscal expenditure is expected to increase from 51.5% of GDP in FY 2025 to 51.7% in FY 2026[2] - **Japan**: The fiscal expenditure is anticipated to rise from 19.9% of GDP in FY 2025 to a historical high in FY 2026[2] - **South Korea**: Fiscal expenditure will increase from 25.5% of GDP in FY 2025 to 26.6% in FY 2026, with a focus on emerging industries and national security[2] - **Canada**: Fiscal expenditure is projected to decrease from 18.4% of GDP in FY 2025 to 18.0% in FY 2026, while aiming to increase capital investment[2]

Group 1: PMI Analysis - The manufacturing PMI for October 2025 is 49.0%, a decrease of 0.8 percentage points from the previous month, indicating a decline in manufacturing activity[1] - The production index fell to 49.7% from 51.9%, and the new orders index dropped to 48.8% from 49.7%[3] - Manufacturing PMI has contracted for seven consecutive months, matching the longest record since August 2015[2] Group 2: Demand and Inventory Insights - New export orders decreased significantly to 45.9% from 47.8%, impacted by new export regulations[3] - The inventory of finished goods decreased only 0.1 percentage points to 48.1%, indicating a high impact of insufficient demand[5] - The purchasing index fell sharply by 2.6 percentage points to 49%, ending two months of expansion[5] Group 3: Price Trends - The output price index declined by 0.7 percentage points to 47.5%, while the raw material purchase price index decreased to 52.5%[4] - The CRB price index increased by 1.55% year-on-year, showing resilience in raw material prices despite the decline in output prices[4] Group 4: Sector Performance - The service sector PMI rose slightly to 50.2%, supported by holiday activities, while the construction index fell to 49.1%[6] - Large enterprises' index decreased to 49.9%, while small enterprises dropped to 47.1%, reflecting a disparity in performance across company sizes[6]