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Which EMs can afford to loosen fiscal policy?

Most of the major EMs have ample fiscal firepower. This is particularly true in Asia and we think fiscal policy is likely to be loosened in much of the region next year, which should cushion slowdowns in growth. Fiscal space is much more limited in a handful of EMs elsewhere, including Brazil and Argentina, and policy will need to tighten to avoid a backlash in local financial markets.

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