Emerging Markets Economics

Weak balance sheets come into focus

Frontier Markets Monthly Wrap
Written by Capital Economics Economist

Market concerns over fragile balance sheets have forced policymakers in a number of frontier economies to take action over the past month. Strains in the balance of payments prompted the authorities in Pakistan and Tunisia to allow their currencies to weaken. And Bahrain has sought financial support from its Gulf neighbours. But we don’t think that these countries are out of the woods and, in all cases, economic growth will be weaker than most expect over the coming years.