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Following a five-year high in March, EM export growth lost a little steam going into the second quarter. We expect growth will gradually slow over the coming months. … Peak has passed for EM export …
9th June 2017
Our view that EMs have entered a period of structurally weaker growth has started to become the mainstream, but there is a tendency to misdiagnose this as solely a problem of deficient investment. Instead, we believe the slowdown is the result of fading …
5th June 2017
May’s PMI data point to a further softening in the recovery of emerging market manufacturing. Nonetheless, the survey still points to expansion, just at a slower pace than at the start of the year. … EM manufacturing recovery loses a bit more …
1st June 2017
Our GDP Tracker suggests that EM growth was broadly unchanged in March, but our “Early Reporters” Tracker provides the first sign that growth may have started to slow in April. We’ll monitor developments closely, but the key point to stress at this stage …
31st May 2017
The latest data suggest that, in aggregate, GDP growth in the largest frontier oil-exporting economies has started to pick up. Kazakhstan’s economy expanded by 3.4% y/y in Q1, the fastest pace of growth since the end of 2014. Meanwhile, the recession in …
26th May 2017
There are still plenty of unanswered questions about the Fed’s plans to reduce the size of its balance sheet, but there are at least three reasons to think that it won’t cause a major dislocation in EM financial markets. … Three reasons not to fear Fed …
25th May 2017
The overall trend in EMs has remained towards looser monetary policy in recent months, with more EM central banks cutting interest rates than hiking them. But significant divergences exist at a country level. The central banks that are loosening policy …
19th May 2017
Political developments in the US and Brazil have led to sizeable falls in EM currencies and equities today but the economic implications for EMs are likely to be limited. Even in Brazil itself, it’s not clear yet that there will be significant economic …
18th May 2017
Emerging market (EM) equities have had another excellent month, with the MSCI EM Index rising 4% to its highest in almost two years. However, we would not be surprised to see it slip back later this year. … EM equities forge ahead …
15th May 2017
Our Tracker shows that net capital outflows from emerging markets picked up in April. Outflows will probably accelerate further later this year, but they are likely to remain subdued by recent standards. … Emerging Markets Capital Flows Monitor …
10th May 2017
EM export growth reached a 5-year high in March, rounding off a strong quarter. We expect this is probably the peak but a healthy global environment means that the EM export recovery is likely to slow only gradually, rather than collapse. … EM export …
9th May 2017
The broad fall in commodity prices this week has weighed on EM commodity currencies, but it doesn’t do much to alter the economic outlook either for EM commodity producers or EM commodity consumers. … Latest commodity price falls don’t alter economic …
5th May 2017
The EM business and consumer surveys seem to have overstated the strength of the hard EM activity figures over the past year or so. That said, the fall in the EM manufacturing PMI in April provides further evidence that the recent recovery in EM GDP …
4th May 2017
April’s PMI data suggest that the recovery in emerging market manufacturing lost a bit of steam at the start of Q2. Nonetheless, the survey is still consistent with continued expansion, albeit at a slower pace. … EM manufacturing recovery softens at the …
2nd May 2017
Headlines in the past month have been dominated by local political events in frontier markets. In Venezuela, violent mass protests have swept the country. Meanwhile, the victory of Serbia’s Prime Minister Aleksandar Vucic in presidential elections has …
28th April 2017
Our GDP Tracker suggests that the EM recovery has taken a breather in recent months, following early signs that growth in China has started to ease. Activity in Latin America and Emerging Europe should still strengthen over the course of this year but if …
27th April 2017
EM export growth softened a little in February but we think this was due in large part to one-offs, including the timing of the Chinese New Year and the effects of 2016’s leap year dropping out of the annual comparison. The early data for March suggest …
21st April 2017
The escalation of political risks has dominated the headlines in EMs in recent weeks, but the fallout in financial markets has been surprisingly small. Equities in Russia and South Korea initially came under pressure following the increase in tensions in …
20th April 2017
The broad stability in EM credit growth in recent quarters masks a large divergence between individual countries, with an acceleration in lending in China offset by a contraction in Brazil and Russia. These divergences should narrow over the course of …
19th April 2017
Our Tracker shows that capital outflows from emerging markets essentially ceased in March. Outflows will probably pick up again later this year, but they are likely to remain weak by recent standards. … Emerging Markets Capital Flows Monitor …
18th April 2017
It has been plain sailing for emerging market (EM) assets again over the past month, with equities and bonds both posting solid gains, and most currencies making more headway against the US dollar. However, we think that the wind will come out of the …
11th April 2017
Political risks in some parts of the emerging world have escalated in recent weeks, but not to the extent that we are marking down our near-term growth forecasts. … Political risks don’t warrant major growth revisions – …
Earlier this week we published our latest Emerging Markets Economic Outlook, which outlined our core macroeconomic and financial market forecasts for 2017-19. In this Update, we summarise five key areas where we think the consensus may be wrong. … Five …
6th April 2017
There has been a sharp turnaround in EM growth in recent months and we expect growth in several major economies, including Brazil and Russia, to surprise on the upside over the next year or so. But this is likely to be offset by a renewed slowdown in …
4th April 2017
March’s PMIs suggest manufacturing in the emerging world rounded off the quarter strongly. In particular, conditions improved in Brazil, Turkey and India. The main exception was Korea, where business conditions declined as political upheaval weighed on …
3rd April 2017
Our GDP Tracker suggests that EM growth has continued to pick up in recent months and is now running at a three-year high. While China’s recovery seems to be running out of steam, Emerging Europe and Latin America have picked up the baton and are now …
30th March 2017
Investors’ attention over the past month has been primarily focussed on the Federal Reserve and the expected number of interest rate hikes in the US this year, but other factors have arguably had a greater influence on frontier financial markets. The …
29th March 2017
There is growing speculation that the largest EMs might step up to fill the void left by the US in the event of a protectionist shift under President Trump. However, there are good reasons why intra-EM trade deals – or indeed EM-led global trade deals – …
21st March 2017
Our tracker suggests that EM capital outflows slowed to a three-year low in February. Outflows will probably increase over the coming months, but they are likely to remain subdued by recent standards. … Emerging Markets Capital Flows Monitor …
20th March 2017
The Fed’s decision to raise interest rates this week has created ripples rather than waves among EM central banks. Policymakers in China and Turkey followed by tightening policy too, but this was as much to tackle domestic problems as it was to address …
17th March 2017
Investors are now united in the belief that the Fed will raise interest rates this week, but we doubt that central banks in the emerging world will necessarily follow suit. Indeed, in several major EMs – notably Brazil and Russia – the bias over the …
13th March 2017
EM export growth continued its strong start to the year buoyed in equal parts by the recovery in commodity prices after their precipitous falls a year previously and an improvement in underlying demand. … EM export rebound not just a commodity price …
10th March 2017
Emerging market (EM) assets have fared quite well over the past month, despite investors expecting the Fed’s next hike to arrive sooner than they did previously. But we doubt that the resilience of markets will last for long. … Bond markets still …
9th March 2017
The latest batch of PMI data suggest that, partly thanks to stronger external demand, conditions in manufacturing sectors across the emerging world continued to improve in February. … EM manufacturing still going …
1st March 2017
The lack of any meaningful reaction in EM currency markets to increased speculation that the Fed could raise interest rates this month appears to reflect three factors: a growing recognition by investors that most EMs are now better placed to withstand …
The recent improvement in the global economic backdrop has been mirrored by a pick-up in growth across frontier markets. National accounts data released by early-reporting frontiers over the past month showed most economies recorded stronger growth in the …
24th February 2017
Our GDP Trackers suggest that the EM world is now growing at its fastest pace in almost three years. However, with China’s economy likely to lose steam over the course of this year, this may be about as good as it gets for EM growth. … EM growth hits …
23rd February 2017
Emerging market inflation and export growth jumped in January, although this had more do with base effects than a marked strengthening of underlying demand or price pressures. The year-on-year growth rates were pushed up due to the comparison with the …
17th February 2017
Aggregate Emerging Market net capital outflows slowed sharply in January. This appears to be partially due to large – but temporary – inflows into the Czech Republic. But it also reflected the continuing easing of outflows from China. According to our …
16th February 2017
EM exports appear to have made a good start to the year, with shipments from China, Brazil and Korea all growing strongly in dollar terms in January. The recent improvement in EM exports hasn’t just been driven by price effects – underlying demand also …
10th February 2017
Financial markets in the emerging world have maintained their strong start to the year. But we don’t expect this to be sustained, as the Fed resumes its tightening and geo-political uncertainty persists. … Recent recovery likely to prove a false …
8th February 2017
2016 was a bumper year for dollar bond sales from frontier markets and the recent pull-back in US Treasury yields has prompted a number of countries to consider returning to international markets. Last week, Argentina issued US$7bn in dollar bonds in a …
31st January 2017
Our GDP Tracker suggests that the EM GDP growth has continued to accelerate in recent months and is now running at its fastest pace in two years. While the recovery is still being driven by China, there are signs that economic conditions in Russia and …
The recent strength of the US dollar has prompted several questions from clients about dollar debt burdens in emerging economies. In this Update, we outline the key points and provide a comprehensive database of dollar debt in major EMs. … EM dollar debt …
27th January 2017
There is no evidence that concerns about rising US interest rates and a strong dollar are forcing EM central banks to tighten policy – indeed, our diffusion index shows that more EM central banks have lowered interest rates than have raised them in recent …
25th January 2017
US foreign direct investment flows into most major EMs aren’t particularly large and a significant portion are concentrated in the mining and financial sectors. These are unlikely to be disrupted even if President Trump continues to encourage US …
23rd January 2017
Within the realms of economic policy, two concerns in particular are likely to occupy both EM governments and investors in the early days of President Trump’s administration: the direct effects on EM economies of a likely shift in trade policy under Trump …
20th January 2017
EM export growth increased towards the end of 2016, but this was mainly due to base effects rather than strengthening demand. While a further pick-up is likely in the near term, EM export growth is ultimately set to remain low by past standards. … …
19th January 2017
Total capital outflows from Emerging Markets (EMs) remained large at the end of last year. Portfolio inflows into EM bond and equity markets, however, remained resilient following the US election result. … Emerging Markets Capital Flows Monitor …
17th January 2017
The Mexican peso and the Turkish lira have come under further pressure over the past couple of days, but the more striking thing is how resilient other EM currencies have been in the face of a globally strong dollar. This reflects the fact that Mexico and …
11th January 2017
