Higher US import tariffs and softening expectations for global growth have caused large capital outflows from EMs. But our currency crisis risk indicators suggest that EMs are well placed to weather this, with external vulnerabilities declining in most countries. Currency crisis risks remain concentrated in the usual suspects, including Argentina and Egypt.
Elsewhere, banking crisis risks remain low almost across the board, although some EMs have risen into “moderate risk”. Sovereign debt risks, meanwhile, remain acute across large parts of Africa. Fiscal positions are fragile in some countries in Latin America and Central and Eastern Europe that are running large budget deficits.
To explore the EM financial risk indicators in more detail please visit our interactive dashboard here.
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