The Iran war and EMs – your questions answered

This Update answers the questions on the Iran war and the impact on emerging markets that we have received most frequently from clients in meetings, through our platform and in our online briefings (watch on demand here). The war will lead to sharp falls in GDP in the Gulf economies and weigh on energy importers, particularly in Asia. Inflation has ticked up on the back of the energy shock and further increases lie in store. Few EM central banks will have room to cut interest rates this year. But by the same token, most are likely to be able to refrain from hiking.