The early evidence suggests that EM exports have held up well, despite higher US tariffs. That’s partly because exporters have front-loaded shipments to the US or have avoided high tariffs via third countries. So long as this remains the case, we expect EM growth to undergo a moderate slowdown this year.
Concerns about the hit to activity from tariffs have prompted a dovish shift by central banks. Further rate cuts are in store. But above-target inflation in CEE and Latin America limits the scope for easing.
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