The sell-offs in the Argentine peso and Turkish lira have sparked fears of broader turmoil in EM financial markets. But, so far at least, this has yet to materialise. Sovereign dollar bond spreads have actually narrowed over the past month in most major EMs; only in Argentina have they widened by a significant degree. And equity markets have held up well too. More generally, financial conditions across major EMs are looser than they were last year. Even so, weak external demand and the drag from past policy tightening means that while EM GDP growth appears to be bottoming out, there is unlikely to be a substantial recovery in the coming quarters.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services