Emerging Markets Capital Flows Monitor

Net capital outflows from major emerging markets have picked up sharply over the past couple of weeks, driven by virus concerns, growing expectations that the Fed will begin tapering asset purchases this year as well as falls in commodity prices. But even if outflows persist, the macroeconomic fallout should be limited in most major EMs.
Kimberley Sperrfechter Assistant Emerging Markets Economist
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Emerging Markets Economics Update

Emerging Markets Capital Flows Monitor

With the notable exception of Turkey, net capital outflows from emerging markets have eased over the past month. However, the global backdrop for EMs this year will be challenging, particularly for those countries where external vulnerabilities are high (Turkey) or growing (parts of CEE and Latin America). Drop-In: Turkey’s new economic policy = old problems (Thurs 20th Jan, 09:00 ET/14:00 GMT). William Jackson and Jason Tuvey discuss the economic problems associated with the lira’s collapse, including the government’s policy response. Register here.

19 January 2022

Emerging Markets Economics Update

Current account risks building in Em. Europe & Lat Am

The shift to current account surpluses in Indonesia and South Africa suggest that these economies may be better placed to weather any fallout from rising US interest rates than in the past. But current account deficits have become an increasing cause for concern in parts of Emerging Europe (Hungary, Poland and Romania) and Latin America (Colombia and Chile). Drop-In: Join Chief Emerging Markets Economist William Jackson and Jason Tuvey, head of our Turkey coverage, shortly after this Thursday’s CBRT meeting for a discussion about Jason’s new report on economic policy-making in Turkey, the impact of the lira’s collapse and brewing macro risks this Thursday 20th January at 09:00 ET/14:00 GMT. Register here.

18 January 2022

Emerging Markets Economics Chart Book

Omicron sweeps across the emerging world

The Omicron variant of COVID-19 is causing new virus cases to surge in the emerging world. Many EMs are reporting record daily cases or that new infections are rising sharply. South Africa’s experience offers some hope – cases are now falling sharply there and it looks like the economic fallout was limited. Elsewhere, most EM governments are following South Africa’s playbook by imposing limited (if any) containment measures, although China is a key exception. And given weakness in testing capacity and large informal sectors in most EMs, workplace absenteeism is unlikely to be as economically disruptive as in DMs.

14 January 2022

More from Kimberley Sperrfechter

Emerging Markets Economics Update

Asian industry struggles, strong recoveries in EM Europe

June’s PMIs show that virus outbreaks have weighed on manufacturing in Southeast Asia while supply bottlenecks and weaker demand created headwinds for industry in China. In contrast, Indian industry rebounded sharply and manufacturing recoveries continue strongly in most of Emerging Europe. Supply disruptions are continuing to exert upward pressure on prices in the latter.

2 August 2021

Emerging Markets Activity Monitor

Clouds over Asia, bright spots in EM Europe & Lat Am

While the pandemic continues to hold back recoveries in Southeast Asia, the near-term outlook appears brighter in Emerging Europe and Latin America. However, low vaccine coverage in the latter means that economies remain susceptible to renewed outbreaks and containment measures. And the slowdown in China is likely to weigh on growth in EM industrial metal producers.

30 July 2021

Emerging Markets Economics Update

Taking stock of the improvement in EM budget deficits

Budget deficits have narrowed from their 2020 peaks across the emerging world. The improvements in Brazil and Argentina – where deficits appear to be narrower than their pre-pandemic levels – provide welcome relief given both countries’ debt troubles, but we doubt that their public finances will remain so strong. Meanwhile, deficits remain wider than their pre-pandemic levels in much of Asia and Central Europe, largely reflecting fiscal packages which should support economic recoveries.

8 July 2021
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