Filtered by Subscriptions: Emerging Markets Economics Use setting Emerging Markets Economics
The vote by the UK to leave the EU is already creating a flight to safety, with financial markets in EMs that have deeper and more liquid markets (Mexico), large current account deficits (South Africa), heavy foreign currency debt burdens (Malaysia), or …
24th June 2016
A continued build-up of private sector debt in China is increasing financial risks. We don’t expect the sharp rise in credit to cause imminent problems, but we are concerned about sustainability in the medium-term. A messy unwinding of the Chinese credit …
23rd June 2016
EM growth has shown some signs of life in recent months. GDP data for Q1 showed a rise in aggregate growth for the first time since 2013 and our GDP Tracker suggests that the improvement continued in the early part of Q2. (See Chart.) The turnaround has …
22nd June 2016
Consumer spending in the emerging world finally looks to have turned a corner, thanks mainly to the bottoming-out of consumer recessions in Russia and Brazil. Spending in Central and Eastern Europe and Emerging Asia have continued to grow at a decent …
21st June 2016
Our Tracker shows that, having spiked at the start of this year, capital outflows from the emerging world have fallen to almost zero over the past couple of months. … Emerging Markets Capital Flows …
14th June 2016
A vote by the UK to leave the EU would likely cause ripples rather than shockwaves in the emerging world. Trade ties with the UK are too small to have a material impact on EM exporters. And while a handful of EMs with large current account deficits would …
10th June 2016
Financial markets in the emerging world have rallied in recent weeks as disappointing US employment figures for May caused investors to trim their expectations for the future pace of Fed tightening. Emerging markets (EMs) are likely to suffer bumps along …
9th June 2016
South Africa’s April output figures suggest that, after a disastrous Q1, the economy improved a touch going into Q2. But the country will still struggle to avoid a technical recession. … “Brexit” poses little risk to EM …
While the manufacturing PMIs rose in most EMs last month, the general picture is still of growth remaining rather tepid by past standards. Central Europe remains the bright spot with the PMIs there pointing to a strengthening in industry over the coming …
1st June 2016
Our GDP Tracker suggests that EM growth picked up for the second consecutive month in March, suggesting that fears of an imminent collapse continue to be misplaced. The latest rise was broad-based but was helped in large part by an improvement in …
27th May 2016
While we have consistently been among the most bearish forecasters of EMs over the past 4-5 years, the consensus has moved a long way in our direction over the past 12 months. Over the next year we suspect that it is now more likely that growth surprises …
23rd May 2016
Emerging market policymakers have been in tightening mode over the past year, but this reversed last month. Our EM interest rate diffusion index shows that more EM central banks cut rates than hiked in April – the first time in ten months that this has …
20th May 2016
Low commodity prices, slower growth and a string of elections have prompted a move towards reform in a handful of frontier market economies in recent months. But while these governments have made impressive starts, much of the hard work is still to be …
19th May 2016
Financial markets in Latin America have comfortably outperformed the rest of the emerging world in the past month. But with rising commodity prices unlikely to offer much more support, we doubt that they will remain the shining star in the months ahead. …
12th May 2016
Credit growth is slowing in most of the economies we have previously identified as being at risk from a rapid build-up of private sector debt. The exception is China, where aggressive stimulus has prompted a recovery in growth, but at the expense of …
The rate at which EM exports are declining slowed sharply in March. We expect that higher commodity prices and an improvement in China’s economy will see export values return to growth later this year. … EM export recovery …
11th May 2016
Our Tracker shows that total capital outflows from EMs declined sharply in April to a 10-month low of a little over $10bn. Outflows from China remained relatively low compared to the past year, while other EMs enjoyed a pick-up in net capital inflows . …
9th May 2016
From Brazil to Turkey, and Malaysia to South Africa, political risks are rising in emerging markets. The immediate triggers for unrest vary from country to country but there are some common themes – including weakening growth and rising discontent with …
6th May 2016
With the Fed leaving the door open to another interest rate hike at June’s FOMC meeting, focus is starting to shift once again to financial vulnerabilities in EMs. A handful of countries are likely to come under pressure as interest rates in the US move …
4th May 2016
There were sharp drops in the manufacturing PMIs in Brazil and India last month, which pulled down the aggregate EM figure. That said, in both countries this seems to reflect survey data catching up with reality, rather than a renewed deterioration in …
3rd May 2016
Our GDP Tracker suggests that EM growth has turned a corner, with the BRIC economies leading the way. Looking ahead, we think that the BRICs will continue to drive a recovery in EM growth. We expect economic activity to strengthen in India and China, …
28th April 2016
A number of frontier markets have turned to the IMF for financial support over the past few months in order to counter strains in their balance of payments. Angola has formally opened negotiations with the Fund, becoming the first major EM oil producer to …
22nd April 2016
The worst looks to be over for many EM commodity producers. Their currencies have again been among the best performers this month, helped by a continued recovery in commodity prices. The slump in their exports also eased considerably in February. What’s …
21st April 2016
The rate at which EM exports are declining slowed markedly in February. Rising commodity prices and a rebound in China should boost exports later this year. … EM export decline easing …
15th April 2016
The further recovery in commodity prices over the past month has given financial markets in the emerging world another leg up. We doubt that commodity prices will rise much further, but with clearer signs that China’s economy is on the mend the rally in …
14th April 2016
Our Tracker suggests that total capital outflows from EMs eased further in March, reaching a nine-month low of just under $40bn. One reason is that the recent improvement in sentiment towards EMs has led to a pick-up in flows to EM bond and equity …
13th April 2016
Angola last week became the first EM oil producer to turn to the IMF since oil prices started to fall in 2014. In the near-term, we don’t expect any others to follow suit. External risks in EM oil producers are limited. There are pockets of vulnerability, …
12th April 2016
The sense of crisis that had been building in emerging markets has started to ease over the past month or so. So what next? In this Update we identify three risks – China, commodities and the threat of currency wars – that we don’t think will trouble …
8th April 2016
The sense of panic about emerging economies that gripped financial markets at the start of this year has eased. This is justified. There are few signs that the emerging world is on the brink of a crisis. Nonetheless, we should not expect a major …
5th April 2016
The rise in the EM manufacturing PMI in March to its highest level in a year adds to evidence that economic conditions across the emerging world are improving. The pick-up in the survey in China is particularly encouraging and reinforces our view that …
1st April 2016
Our GDP Tracker suggests that aggregate EM growth dipped at the start of this year, but this appears to have been driven by deepening problems in Brazil and a recent soft patch in India. China’s economy has been relatively stable and there is growing …
30th March 2016
A combination of improving investor sentiment and a pick-up in global commodity prices has underpinned a recovery in frontier financial markets in recent weeks. Since reaching a two-year low in early January, the MSCI Frontier Markets Index has risen by …
24th March 2016
The last month has seen EM financial markets recover from their poor start to 2016. Our Synthetic EM Exchange Rate Index has rallied to its strongest level since November. Almost all EM currencies have strengthened against the US dollar over the past …
23rd March 2016
The risk of a systemic EM financial crisis remains low. Our CERI suggests that financial vulnerabilities across the emerging world are much smaller now than at the time of previous crises and have actually been falling over the past few months. As a …
17th March 2016
The latest trade figures have reignited fears about the health of emerging markets. But while EM trade growth has slowed in recent years, we see little reason for alarm. … EM trade fears …
15th March 2016
Consumer spending growth has risen far more sharply in Emerging Europe than in Emerging Asia over the past year and a half, even though both regions have received a similar boost from the drop in oil prices. We think that is partly because consumers in …
9th March 2016
Our Tracker suggests that aggregate EM capital outflows declined markedly last month, to around $40bn, one of the lowest figures in the past year. This was driven by a fall in outflows from China, while capital flows to the rest of the emerging world …
8th March 2016
The slump in growth in EM commodity producers partly reflects a deterioration in potential growth rates in these economies but is mainly the result of cyclical weakness caused by a collapse in their terms of trade. This means that, while growth in these …
7th March 2016
The fall in February’s manufacturing PMI surveys across emerging markets serves as a reminder that, while the worst for the industrial sectors in most EMs is probably behind us, conditions remain difficult. The outlook is particularly bleak for …
1st March 2016
Our GDP Trackers suggest that aggregate EM growth was stable at the end of last year as a dip in Emerging Asia was offset by signs of recovery in Emerging Europe . The improvement in Emerging Europe means that Latin America is now the worst performing EM …
26th February 2016
Political tensions have once again come to the fore in Ukraine, putting the country’s IMF programme at risk. Although the government survived a no confidence vote, the ruling coalition has fallen apart and it remains to be seen if a new coalition can be …
24th February 2016
Aggregate EM growth has continued to disappoint in recent months with signs of a renewed (albeit small) deceleration in the latest data. Perhaps more important though is the widening divergence in performance across the emerging world. The latest slowdown …
Over the past week we have published a four-part series analysing the key issues that will shape the outlook for emerging markets. In this Update , we summarise the main messages. … What next for …
23rd February 2016
Rapid EM growth in the 2000s was driven by a wave of liberalising reforms that produced genuine economic transformation across the emerging world, but potential growth has now slowed. Accordingly, while we expect EM growth to rebound over the next year, …
19th February 2016
The value of EM exports dropped by more than a trillion dollars last year but the pace of contraction eased in Q4. We expect further improvements in 2016 as global demand strengthens. … Worst should be over for EM …
A wave of debt defaults and financial stress in emerging market oil producers seems unlikely but, with energy prices set to stay low, growth is likely to be much weaker than most anticipate. Among the major oil economies, Russia is likely to spend another …
18th February 2016
Aggregate EM capital outflows stood at over $100bn in January and, on a quarterly rolling basis, they increased to a third of a trillion dollars, a record figure by some distance. This continued to be driven by capital moving out of China. … Emerging …
16th February 2016
Notwithstanding some renewed pressure in recent days, financial markets in the emerging world have held up fairly well in the past month. Indeed, while bonds, equities and currencies have all fallen in commodity-exporting countries, those elsewhere have …
9th February 2016
EMs are much better placed now than in the past to weather potential problems caused by sharp drops in their currencies. But by the same token, those EMs that have seen the largest falls in their exchange rates over the past few years do not appear …
8th February 2016
There are signs that the collapse in emerging market (EM) equity prices, spurred by concerns that China’s economy is heading for a hard landing, has gone too far. We believe that China’s economy will perform better than most anticipate this year, leaving …
2nd February 2016
