EM world is facing a difficult year

The EM recovery is still struggling for momentum, with our GDP tracker suggesting that the upturn in growth seen in mid-2013 may have stalled. On the positive side, it seems unlikely that the most recent bout of market turmoil will have a significant negative impact on most EM economies. Growth proved resilient during the sell-offs of last year. Inflation has also remained fairly benign in the face of currency depreciation, while weak commodity prices should help cushion the impact of higher import prices going forward, even in the economies worst hit by the sell-off. This is not to say that the outlook for EMs is particularly bright. But for much of the EM world, the bigger economies in particular, the problems are domestic and structural.