Most emerging economies have made a weak start to the year. The Q1 GDP data released so far point to a slowdown in aggregate EM economic growth and early activity data for April suggest that this has carried on into Q2. The largest EMs, in particular, are continuing to struggle – Russia suffered a contraction in the first quarter, China experienced a slowdown, and data next week will almost certainly show that the Brazilian economy has continued to contract. Moreover, several smaller EMs recorded soft growth during Q1. But it’s not all doom and gloom. The bright spots have been in Central and South Eastern Europe, where accommodative monetary policy and lower oil prices have provided a boost to consumer spending.
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