Aggregate EM GDP growth will enter a slower phase over the coming quarters. But the headline figure masks large variation in prospects at a country level, with many EMs experiencing a reversal of last year’s fortunes. While we expect the EM monetary easing cycle to broaden out over the course of the year, a reassessment of expectations for Fed policy this year mean that this process will probably be slower than we had initially thought. Our financial risk indicators suggest that vulnerabilities in the emerging world have eased, with risks concentrated in frontier markets.
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