Key calls for EMs in 2020

2020 will be a year in which EM GDP growth edges up and many major central banks catch investors by surprise. This Focus outlines our key calls for next year.
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Emerging Markets Financial Risk Monitor

Turkey and frontiers in the firing line

The dramatic slump in the Turkish lira over the past month once again leaves the currency firmly in crisis territory. One crumb of comfort is that Turkish banks are in a better position to cope with large falls in the lira than they were during the 2018 crisis. Elsewhere in the emerging world, sovereign vulnerabilities look particularly acute in a handful of frontier markets, while longer-term banking sector risks loom in the UAE, India and Russia.

7 December 2021

Emerging Markets Economics Update

Disruptions no longer worsening, but Omicron a threat

November’s PMIs offered tentative signs that the worst of the supply disruption may have passed, but the bigger picture is that manufacturers in the emerging world remain stretched. And while it’s still too early to tell, the Omicron variant could exacerbate existing strains. The upshot is that supply constraints are likely to continue to weigh on industry for some time yet.

1 December 2021

Emerging Markets Trade Monitor

The impact of Omicron on EM trade

If the new Omicron variant leads to tighter containment measures across the world, that would probably prop up demand for pandemic-related goods to the benefit of Asian exporters. Meanwhile, oil producers are likely to see external positions deteriorate if the plunge in prices is sustained. But arguably the most clear point for now is that the new variant will lead to renewed slumps in tourism, adding to balance of payments risks in the likes of Tunisia and Sri Lanka.

30 November 2021

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Emerging Markets Economics Chart Book

Asia now the epicentre

The severe waves of COVID-19 that afflicted Emerging Europe and Latin America earlier in the year are now subsiding and the near-term economic outlook there has brightened. But several Asian economies have become the focus of concern instead. India accounts for about half of total global new virus cases, although the latest figures at least offer hope that the worst may be over. Other Asian economies such as Thailand, Taiwan and Vietnam that had, up till now, controlled the virus very well have suffered a rise in new cases (albeit to still very low levels in the latter two). (See Chart 1.) That is likely to weigh on activity and also serves as a reminder that, for the many EMs where vaccination coverage remains low, the threat of new outbreaks will persist.

19 May 2021

Emerging Markets Economic Outlook

New virus waves to drag on the recovery

The surge in virus cases across large parts of the emerging world and the slow pace of vaccine rollout mean that the headwinds facing the EM recovery are building. EM currencies are likely to see further falls against the dollar this year, but fears of a repeat of the Taper Tantrum look overdone. One consequence is that EM central banks won’t turn to turn to monetary tightening as quickly as most currently expect.

28 April 2021

Emerging Markets Economics Chart Book

Virus outbreaks cloud the outlook

New COVID-19 cases have surged in the emerging world, with India, Emerging Europe and Latin America particularly hard hit. Social distancing measures have been tightened in many countries, which will weigh on activity. The early evidence suggests that the EM recovery had already lost some momentum in Q1 and that’s likely to continue into Q2. Growing headwinds to the economic outlook add to reasons to think that most EM central banks will look through the coming spike in inflation.

21 April 2021
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