EM growth has shown some signs of life in recent months. GDP data for Q1 showed a rise in aggregate growth for the first time since 2013 and our GDP Tracker suggests that the improvement continued in the early part of Q2. (See Chart.) The turnaround has been driven primarily by commodity exporting countries. The recession in Brazil is starting to bottom out and, while May’s data were softer than expected, Russia’s economy is through the worst. While we don’t expect the recoveries in either economy to impress, we do think economic conditions will continue to improve over the coming months and quarters. This should ensure that EM growth edges up further over the second half of 2016.
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