Emerging Markets Capital Flows Monitor

Net capital inflows into EMs appear to have dropped over the past few weeks as investors have turned more risk averse. Looking ahead, a further rise in US Treasury yields could lead to larger outflows from EMs over the coming months. The good news is that vulnerabilities to outflows in most major EMs look limited, but Turkey is a key exception.
Shilan Shah Senior India Economist
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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

Emerging Markets Economics Update

The Omicron variant and the threat to EMs

There’s a lot that we don’t know about the new Omicron variant. But if it proves more virulent, the economic fallout would probably be largest in EMs in parts of Africa and South and South East Asia that have lower vaccination rates, more limited fiscal space and/or larger tourism sectors. The new variant may also temper the pace of tightening cycles in parts of the emerging world. In view of the wider interest, we are also sending this Emerging Markets Economics Update to clients of all our Emerging Markets services.

29 November 2021

More from Shilan Shah

India Economic Outlook

Recovery enters a slower phase

Following a rapid rebound from the second virus wave, India’s economy is beginning to lose some steam. And with vaccination coverage still low, downside risks remain significant. Under these circumstances, the RBI is likely to keep policy accommodative for several months yet. And the longer the pandemic rumbles on, the greater the risk of the economy suffering long-term scarring.

11 October 2021

Emerging Markets Economics Update

The vaccine tide is slowly turning

A likely flood of exports from India and China, as well as a ramping up of donations from the US, should help to significantly boost vaccine supply for the many poor EMs in Africa and South and South East Asia whose vaccine rollouts lag behind. That said, logistical constraints and, to a lesser extent, vaccine hesitancy are likely to prove new headwinds to rollouts.

6 October 2021

RBI Watch

Rate hikes remain a distant prospect

Policy rates are highly likely to be left unchanged at the conclusion of the RBI’s upcoming MPC meeting on Friday 8th October, particularly given the recent drop in inflation. The committee might announce further measures to drain liquidity from the banking sector, but these will probably not amount to anything more than marginal tweaks. The big picture is that policy will remain very accommodative for several months yet.

29 September 2021
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