Filtered by Subscriptions: Emerging Markets Economics Use setting Emerging Markets Economics
The latest hard activity figures suggest that EM growth held up well going into Q2, but that headwinds to the macroeconomic outlook are starting to build. The most recent trade figure show that EM export growth was slowing even before the latest fears of …
21st June 2018
Emerging market (EM) equities have been caught up in the more general sell-off in EM assets in the past month, with the MSCI EM Index dropping by about 3% in local currency terms. Even if recent headwinds abate, there are other reasons to think that the …
20th June 2018
The details of the Trump administration’s threat to step up its trade conflict with China are not yet clear, but one notable feature is that the market fallout for the emerging world has been greater than in previous episodes in which fears of …
19th June 2018
The recent rise in global trade tensions comes at a time when EM export growth has already started to slow. Higher oil prices will provide a boost to export growth in value terms in the next few months, but this will quickly fade. In the meantime, …
15th June 2018
History suggests that the sell-off in EM currencies over the past couple of months could be large enough to push central banks in Mexico, Brazil and South Africa to raise interest rates – although the scale of any tightening is likely to be much smaller …
14th June 2018
Despite the market turmoil of recent weeks, problems in Turkey and Argentina look to be isolated incidents, with our capital flows Tracker giving no indication of large or widespread capital outflows from EMs as a whole. … Emerging Markets Capital Flows …
There are already signs that the large EM oil exporters are responding to higher oil prices by scaling back austerity, which will help to drive stronger growth this year. But it’s notable that higher oil prices haven’t led to a further loosening of …
7th June 2018
Fears that a reduction in the size of the Fed’s balance sheet will somehow reduce the amount of dollars available to EMs to finance their external liabilities is grounded in a fundamental misconception about how monetary economics works. A rise in US …
6th June 2018
The aggregate EM manufacturing PMI nudged down in May, but the more interesting story lies in the regional divergences, with readings in Latin America and Emerging Europe dropping but those in Asia holding up reasonably well. … PMIs point to regional …
1st June 2018
Frontier financial markets have been among the main victims of the recent EM sell-off. The Argentine peso has been by far the worst performing frontier currency, falling by around 17% against the dollar. The central bank was forced to hike interest rates …
31st May 2018
The recent turmoil in EM financial markets has invoked comparisons to the debt crises of the 1980s and 1990s but these look wide of the mark. Those crises had their roots in large external financing vulnerabilities but – Turkey and Argentina aside – the …
30th May 2018
Our EM GDP Tracker suggests that growth stabilised in Q1 and early signs point to growth having picked up at the start of Q2. The recent market stress is likely to push a handful of economies (notably Argentina and Turkey) towards recession, but we do not …
29th May 2018
The Argentine Peso and Turkish Lira came under fire this month, prompting policymakers in both countries to aggressively hike interest rates. The two currencies have firmed a bit, but are still down by over 15% on the month. Other EM currencies also …
25th May 2018
Warnings that the market turmoil in EMs over the past few weeks could presage a spate of crises similar to the late 1990s look overdone. A more sober assessment reveals three key points. … Why there’s less to the EM sell-off than meets the …
24th May 2018
The sell-off that has gripped EM financial markets over the past few weeks has raised parallels with the Taper Tantrum that occurred almost five years ago to the day. However, economic and financial vulnerabilities have declined in recent years and are …
21st May 2018
So far, there is little evidence that the sell-off in EM financial markets has fed through into a broader tightening of financial conditions. As a result, it is unlikely to have much impact on EM GDP growth. The exceptions are, unsurprisingly, Argentina …
17th May 2018
Emerging market (EM) currencies have fallen sharply on average against the dollar since the middle of last month, and we forecast that they will weaken further between now and the end of next year. … Will the slide in EM currencies …
16th May 2018
Argentina’s currency crisis and turn to the IMF for financial support have raised questions about how much ammunition EMs’ foreign exchange reserves provide. On the broadest measure of external financing needs, Venezuela, Ukraine and Turkey are, along …
15th May 2018
The very latest trade figures show that EM export growth has already started to soften and the continued weakening of the survey data suggest that this slowdown will continue in the coming months. … Early signs of an EM export …
EM financial markets have steadied today, but the moves over the past few weeks have been relatively large compared with the other Fed-related sell-offs over the past 18 months. That said, this sell-off has been much less severe than those driven by …
10th May 2018
Capital flows to emerging markets have slowed in recent weeks. But for all the talk of a broad-based selloff in EM assets and a pull-back by foreign investors, there’s little evidence so far to suggest that emerging markets have suffered abrupt capital …
9th May 2018
April’s PMIs suggest that, having slowed in Q1, growth in EM manufacturing steadied at the start of Q2. But the surveys brought further evidence that EM export growth may weaken in the coming months. … EM manufacturing stabilises at the start of …
2nd May 2018
The recent pressure on EM currencies has prompted a stronger reaction from EM central banks than we have seen for some time. But while we do expect a general shift towards monetary tightening in the emerging world over the coming year, that will be driven …
30th April 2018
Public debt positions across the emerging world have come under scrutiny recently and the risks appear to be concentrated in frontier markets. In aggregate, the debt-to-GDP ratio of frontier governments has risen by almost 15% of GDP over the past five …
Our EM GDP Tracker suggests that growth in the emerging world eased over Q1, which seems to have been driven by weaker activity in EM industry. … EM growth softens in …
27th April 2018
The latest rise in oil prices has eased fiscal concerns in a number of EM oil producers but only at the expense of increased balance of payments concerns in some EM oil consumers, notably Turkey and Egypt. … Winners and losers from the latest jump in …
25th April 2018
The recent string of weak inflation data released across EMs has been due largely to a drop in food inflation and, while we think that many central banks will look through this, policymakers in some countries (mainly in Latin America) will continue to use …
23rd April 2018
President Donald Trump’s proposed tariffs on imports from China have raised concerns of a trade war between the world’s two largest economies. Many fear that this could have knock-on effects on EMs, particularly those which are closely integrated into …
20th April 2018
The export components of the EM business surveys have not deteriorated to the same extent as those in developed markets over the past couple of months, but they nonetheless add to the evidence that aggregate EM growth has peaked in this cycle. … Export …
19th April 2018
The IMF’s latest Fiscal Monitor has put the rise in EM public debt over the past decade back under the spotlight. While debt ratios have increased across most of the emerging world, major vulnerabilities are concentrated in a few relatively small …
Financial risks remain low in the emerging world. However, since our last Financial Risks Monitor, currency vulnerabilities have increased in a handful of countries. … Currency vulnerabilities building in a few …
16th April 2018
Our Tracker shows that aggregate capital flows to EMs have been resilient over the past few months in the face of fears of a protectionist shift in the US and sell-offs in equity markets. Concerns about protectionism have eased in recent days, but the …
13th April 2018
The US tariffs on China announced last week will, if implemented, have knock on effects on other EMs though supply chains, particularly in parts of East Asia and in Chile. The impact of the measures announced so far would be small. An escalation of US …
12th April 2018
The proposed US tariffs on imports of Chinese goods could have knock-on effects on other EMs, especially in East Asia, via supply chains. And countries such as Turkey are vulnerable to a deterioration in risk appetite resulting from escalating trade …
4th April 2018
The falls in EM manufacturing PMIs last month provide further signs that, after a pick-up right at the start of this year, growth in the emerging world eased over the course of Q1. … EM manufacturing softens at the end of …
3rd April 2018
As long as they aren’t followed by far more extensive trade sanctions than have been seen to date, the protectionist clouds looming over the global economy are unlikely to have a major bearing on emerging economies over the next year. Nonetheless, in …
28th March 2018
Having slowed over the final quarter of last year, our GDP Tracker suggests that EM growth nudged up for the first time in five months in January. … Better news at the start of …
27th March 2018
Most major Emerging Market currencies have fared well over the past month even as concerns of a global trade war have mounted, but a number of those in Frontier Markets have struggled. Indeed, only four out of the 32 frontier currencies that we cover have …
23rd March 2018
The EMs with the largest debt burdens are (unsurprisingly) most vulnerable to a spike in global borrowing costs. However, interest rates are only one of several components that determine debt sustainability. Even if they remain stable, there are reasons …
21st March 2018
The Fed is likely to raise interest rates once again this week but, from the perspective of EMs, the most striking thing remains how few central banks have followed in the Fed’s footsteps. As our diffusion index shows, more central banks in the emerging …
20th March 2018
Media reports suggest that the US is planning to impose more extensive tariffs on China. This could have a significant knock-on impact for a number of economies in Emerging Asia (Taiwan, Malaysia, Vietnam and Korea) – as well as for some industrial metal …
16th March 2018
Emerging market (EM) credit spreads have stabilised recently after a slight pick-up in early February on the back of the sell-off in global equity markets. But this may just be a temporary respite. In our view, spreads are likely to rise much further over …
15th March 2018
Our Tracker suggests that, after a short period in January in which capital flowed into EMs, the emerging world experienced net capital outflows once more in February. So far, the deterioration in capital flows has been limited to portfolio flows. But as …
9th March 2018
Fears are growing that recent developments in the US, including the imposition of tariffs on steel and aluminium as well as the apparent ascendancy of economic nationalists within the White House, may represent the start of a more fundamental shift …
8th March 2018
GDP data for 2017 revealed a widespread improvement in growth in key EM commodity producers last year. While we are relatively downbeat on the medium-term prospects for most of these economies, we think the cyclical recovery currently underway has further …
6th March 2018
The steel and aluminium import tariffs announced by the US yesterday are unlikely to have a major impact on emerging economies but fears that they might presage a broader shift towards protectionism have nonetheless rattled EM markets today. With this in …
2nd March 2018
The latest EM aggregate PMI from Markit remained unchanged in February, and suggests that the emerging world’s manufacturing sector continues to grow at a robust rate. However, this masks regional divergences in industrial performance that have emerged in …
1st March 2018
International bond markets have been inundated with debt issuance from frontier markets over the past couple of years and there’s no sign yet that appetite is waning. Since the start of this year alone Nigeria, Kenya and Argentina have all issued dollar …
28th February 2018
Events over the past month suggested that the Emerging Market (EM) recovery might not be as strong and stable as some seem to think. Economic data for the end of last year pointed to slightly softer growth. Our GDP Tracker suggests that total EM growth …
27th February 2018
Our GDP Tracker suggests that EM growth softened at the end of last year and early indicators point to further weakness at the start of 2018. … Further slowdown of EM GDP …
26th February 2018
