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How important is Chinese tourism?

Chinese international tourist spending has surged over the past decade, which is one reason to think that the economic spillovers will be greater for the coronavirus than they were for SARS. But outside of Asia (and Mauritius), Chinese tourist spending is still a very small share of spending in EM economies.
Edward Glossop Emerging Markets Economist
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Emerging Markets Economics Update

A closer look at the surge in EM food inflation

Aggregate EM food inflation has risen to its highest rate since 2008 and, while it should fall back in 2023, it’s likely to stay extremely high for at least the next four-to-six months. That will keep consumer spending under pressure and provide another reason for EM central banks to tighten monetary policy further. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

28 June 2022

Emerging Markets Economics Update

EMs stepping up to support currencies

A handful of EM central banks have ramped up FX sales to provide support to weakening currencies over the past couple of months. And with inflation high and the US dollar likely to strengthen further, others could follow suit. FX intervention is unlikely to prevent further depreciation, but central banks with healthy FX reserve buffers may have some success in slowing the pace of currency falls. In view of the wider interest, we are also sending this Emerging Markets Overview Update to clients of our FX service.

24 June 2022

Emerging Markets Economics Chart Book

High inflation to keep central banks in tightening mode

Having surged in recent months, there are some tentative signs that EM inflation is nearing a peak. Our measure of aggregate EM inflation was steady at 7.0% y/y between April and May and some indicators of pipeline price pressures have eased. But even so, our aggregate measure is running at its highest rate since 2008 and, even when inflation does fall back, it’s likely to remain well above many EM central banks’ targets for some time. Against this backdrop, most EM central banks are likely to tighten monetary conditions further. Indeed, we generally expect more rate interest rate hikes than most analysts do over the next 12-18 months. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

23 June 2022

More from Edward Glossop

Frontier Markets Monthly Wrap

SDR allocation no panacea for distressed frontiers

A fresh allocation of IMF Special Drawing Rights (SDRs), if implemented, would provide a welcome boost to the depleted foreign exchange reserves of some distressed frontier economies. But an allocation wouldn’t address underlying dire debt dynamics, notably in Ecuador, Sri Lanka, Ethiopia and Zambia.

3 March 2021

Emerging Markets Economics Update

Manufacturing PMIs still point to further EM recovery

February’s manufacturing PMIs released across the emerging world were the proverbial mixed bag but, taken together, generally point towards solid EM industrial production growth in the next month or two. There are signs under the hood of supply disruptions and rising price pressures in some places, which may be explained partly by semiconductor shortages.

1 March 2021

Emerging Markets Trade Monitor

Microchip shortages: first thoughts on the trade impact

A global shortage of semiconductors is disrupting auto production, and – among EMs – it could hit exports from Central Europe and Mexico in particular. But some of the lost revenue should be made up once shortages ease. Meanwhile, strong semiconductor demand is positive for the major producers in Asia, although their overall export revenues are still likely to soften later this year as global consumption patterns normalise.

26 February 2021
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