Filtered by Subscriptions: Emerging Markets Economics Use setting Emerging Markets Economics
The recent sell-off in emerging market (EM) equities after the US stock market slumped reiterated how exposed they are to movements in developed market equities. Although EM equities have since recovered a bit, we think that further falls in the S&P 500 …
23rd February 2018
Our Capital Flows Tracker suggests that net flows to EMs turned positive in January for the first time since April last year, but subsequent market moves suggest that we are likely to have seen a shift back to outflows in February. That said, despite the …
21st February 2018
The consensus on growth in Emerging Markets (EMs) remains too rosy; by contrast we think that the current cycle is now close to peaking. While we do not expect EM growth to collapse, we do think it will slow over the course of 2018 and 2019. What’s more, …
20th February 2018
Concerns about rising inflation pressures in the US have sent shockwaves through EM financial markets over the past week or so, but the economic fallout is likely to be limited. A sharp and sustained rise in US inflation would present a significant …
15th February 2018
Survey-based measures of manufacturers’ export expectations suggest that EM export volume growth is set to strengthen over the coming months. Growth in both EM export volumes and values will, however, probably slow in the second half of the year. … …
14th February 2018
The further falls in global equities over the past 24 hours have not left EMs unscathed, but in general EMstocks have held up better than DM stocks and there’s little evidence that falls in equities are affectingother EM assets. From an economic …
9th February 2018
EM governments with the largest financing needs are, in theory at least, most vulnerable to a global spike in bond yields. This includes Egypt, Brazil, South Africa and India. However, it’s worth noting that the rise in US government yields over the past …
5th February 2018
The latest EM aggregate PMI from Markit dipped in January but nonetheless remains consistent with solid rates of output growth in most regions. The dip in the headline figure was driven by a fall back in surveys in India, the Philippines and Brazil – …
1st February 2018
EMs in Latin America and Emerging Asia have benefitted most from China’s recovery over the past 18 months. These economies therefore have the most to lose if China begins to weaken again, although the modest slowdown we expect this year is unlikely to …
31st January 2018
Our estimates for aggregate EM GDP growth suggest it hit a five-year high over 2017 as a whole, but there are signs that growth slowed in the final quarter of last year. … EM GDP growth loses steam in …
30th January 2018
The recent rally in oil prices has brightened the outlook for the majority of frontier oil exporters. In the Gulf, for example, higher oil prices and strong balance sheets have enabled the authorities to ease back on the harsh fiscal austerity of the past …
26th January 2018
The trade protection measures that have so far been announced by the Trump administration are fairly small in scope and will not have much of a bearing on the outlook for EM exports. However, we’ve long argued that the risks around trade are likely to …
24th January 2018
EM currencies have strengthened at the start of 2018 and our synthetic EM exchange rate index has jumped to an 18-month high, but we don’t expect the rally to continue. Indeed, we think most EM currencies will end the year weaker than their current …
22nd January 2018
EM financial markets have made a flying start to 2018, with most equity markets up by 4-6% since the start of the year and most currencies up by 2-3% against the US dollar. However, the incoming economic data have, if anything, been slightly softer than …
19th January 2018
Early data for December suggest that EM export growth finished 2017 on a slightly softer footing and support our view that trade growth will slow this year. … Signs of EM trade softening heading into …
18th January 2018
The economic gains from the recent rise in oil prices are concentrated among a handful of EMs (mainly in the Gulf) but the losses are spread more widely. That being said, if oil holds onto its recent gains it would push current account deficits back over …
15th January 2018
Our tracker suggests that EM capital outflows picked up a bit in December, but remained slow over the year as a whole. Portfolio flows into EMs hit a record high last year, and look strong going into 2018. … Emerging Markets Capital Flows Monitor …
12th January 2018
Several major EMs, notably Brazil and Russia, are likely to experience a pick-up in growth this year. But in others, including China, the cycle is now peaking. The net result is that, in contrast to the upbeat consensus, we expect aggregate EM growth to …
11th January 2018
Our indicators suggest that, while financial risks in EMs have diminished over the past couple of years, pockets of vulnerability exist in several countries including Turkey, Hong Kong and Singapore. … Vulnerabilities linger in a handful of …
10th January 2018
Frontier markets have enjoyed a recovery in 2017, with aggregate GDP growth set to reach close to 3%, up from a seven-year low of 2.3% in 2016. Frontiers in Latin America and Sub-Saharan Africa have exited recession, while growth has strengthened among …
20th December 2017
Our GDP Tracker suggests that the emerging world is on course to grow by just over 4.5% in 2017 – it’s fastest pace of expansion in six years. The pick-up has been broad-based, with growth in Emerging Asia, Emerging Europe and Latin America accelerating …
18th December 2017
2017 was the first year since 2014 in which EM exports recorded positive growth. However, two of the key props to this year’s export recovery are likely to weaken over the coming quarters – meaning that EM export growth is likely to soften in 2018. … …
15th December 2017
The emerging world is currently expanding at its fastest pace in four years, but we don’t think this will last in 2018. In this Focus we outline our key calls for next year. … Key calls for EMs in …
14th December 2017
Despite the prospect of more monetary tightening in the US than investors are anticipating next year, we think that local factors will have more of a bearing on monetary policy in emerging markets (EMs) then. Reflecting this, we would not be surprised to …
13th December 2017
Our tracker suggests that capital flows into and out of the EM world were essentially balanced last month. Over 2017 as a whole, outflows will be about US$55bn, just an eighth of the total recorded in 2016. … Emerging Markets Capital Flows Monitor …
12th December 2017
In this note we publish a guide to elections that are scheduled across the emerging world in 2018. The calendar is busier than it was in 2017 but, whereas elections this year boosted the prospects for economic reforms in some EMs (e.g. Argentina), the …
6th December 2017
The latest Markit PMI surveys suggest EM manufacturing growth has gained momentum across the emerging world and looks set to end the year on a positive note. … EM manufacturing growth on the rise in …
1st December 2017
Our GDP Tracker suggests that aggregate EM growth picked up to its fastest pace in just over five years in September. However, more timely data from early reporting countries suggests that growth has softened at the start of Q4. … EM GDP growth ends Q3 on …
29th November 2017
The risks around EM credit expansion are, in our view, commonly misunderstood. In particular, threemyths appear to have developed in commentary around the subject. … Debunking three myths about EM …
28th November 2017
Frontier markets have been gripped by political upheaval in recent weeks. In the largest frontier economy, Saudi Arabia, Crown Prince Mohammed bin Salman (known as MbS) has overseen a high-profile anti-corruption crackdown. Tackling corruption is clearly …
24th November 2017
The latest data continue to show a broad acceleration in GDP growth across most of the emerging world. A common thread has been a pick-up in exports, with volumes growth now up on the start of the year in every EM region with the exception of the Middle …
22nd November 2017
Periodic bouts of investor concern over Fed policy tightening appear to be having less and less effect on financial markets in EMs. That being said, the one consistent theme that emerges from our analysis of recent Fed-related sell-offs is that one EM …
15th November 2017
The jump in oil prices over the past couple of weeks doesn’t radically alter the outlook for EMs. However, if sustained, it could exacerbate concerns we already have about some parts of the emerging world – for example, by causing Turkey’s current account …
13th November 2017
EM exports look to have finished Q3 on a strong note, albeit with help from seasonal effects. Otherwise, a year on from Trump’s election, protectionist rhetoric is yet to result in material changes to trade policy. But Trump’s words during his Asia tour …
10th November 2017
Our tracker suggests that EM capital outflows picked up to a nine month high in October. Even so, they remained weak by the standard of recent years. … Emerging Markets Capital Flows Monitor …
9th November 2017
One year on from his election, Donald Trump is struggling to live up to the promises he made on the campaign trail to get tough with countries that run big bilateral trade surpluses with the US. However, it is clearly too soon to sound the all-clear, …
8th November 2017
The nomination of Jerome Powell to be the next chair of the Fed doesn’t have significant implications for EMs. We think that the economic recovery is close to peaking in several emerging economies and that the best days of the rally in EM asset prices are …
2nd November 2017
Our estimate of the aggregate Emerging Market manufacturing PMI suggests that manufacturing activity weakened at the start of the Q4. This slowdown appears to be broad-based across EM regions. … EM manufacturing growth eases in …
1st November 2017
Our GDP Tracker suggests that aggregate EM growth picked up to its fastest pace in four-and-a-half years in August. However, there are some early signs that EM growth will ease over the coming months. … EM GDP growth at multi-year high in …
30th October 2017
The raft of GDP data released over the past month or so showed that the recovery in frontier markets strengthened in Q2. According to our GDP-weighted measure of growth, frontier economies expanded by 2.4% y/y in Q2, up from 1.9% y/y in the previous …
25th October 2017
Our relatively sanguine view on the outlook for EMs over the next 12-18 months has prompted several clients to ask about risks to our forecasts. While risks – both positive and negative – are by their nature difficult to anticipate, we think there are …
24th October 2017
In an otherwise quiet month for EM markets, the sharp falls in the Mexican peso and Turkish lira have stood out. In each case, the triggers have been different – the 7% fall in the peso against the dollar since the start of the month reflects concerns …
20th October 2017
After a big rally earlier in the year, emerging market (EM) currencies have weakened against the dollar recently as US rate expectations have picked up. We doubt that much larger falls are around the corner, even though we think that the Fed will hike by …
19th October 2017
Total EM capital outflows slowed to a trickle in September. Portfolio inflows also seem to be slowing, but they remain very high by the standard of recent years. … Emerging Markets Capital Flows Monitor …
17th October 2017
EM exports look to have grown strongly in Q3, helped by a rise in commodity prices. However, this is unlikely to herald a return to the rapid rates of export growth seen at the beginning of 2017. Export growth is instead set to gradually slow over the …
13th October 2017
All EMs have entered a period of permanently weaker growth but it remains the case that growth rates over the next decade or so will differ significantly between countries. In this Focus we identify the likely characteristics of winners – and losers – in …
11th October 2017
Economic growth looks set to strengthen in most EMs over the next year, but the cycle is now close to peaking in China and parts of Central and Eastern Europe. … Nearing the cyclical …
5th October 2017
The decision by the Fed to begin the process of balance sheet reduction this month – coupled with the heavy hints that a December rate hike remains on the table – has led several clients to ask about dollar debt burdens in EMs. In this note we revisit a …
4th October 2017
The latest Markit PMI surveys suggest that conditions in emerging market manufacturing eased a touch at the end of Q3, but remain robust compared with the past few years. … EM manufacturing still in decent …
2nd October 2017
Our GDP Tracker suggests that EM growth picked up in July to its fastest pace since Q1 2014. But there are early signs that growth has since peaked in parts of the emerging world. … EM growth picks up at the start of …
28th September 2017
