Filtered by Subscriptions: Emerging Markets Economics Use setting Emerging Markets Economics
The fact that the mounting concerns about Greece’s future within the euro-zone have had only a limited impact on financial markets across the emerging world appears to reflect the belief that problems in Greece should be contained. Some EMs are more …
29th January 2015
The collapse in global oil prices will provide a boost to most economies in the emerging world. However, it will come at the cost of weaker growth in the Middle East, and deep recessions in Russia and Venezuela. Accordingly, the net impact on overall EM …
28th January 2015
Lower oil prices should provide a welcome boost to incomes, and hence consumption, in large parts of the emerging world. We are particularly upbeat about the outlook for consumers in China, India, the Philippines and Central Europe. At the other end of …
23rd January 2015
The programme of asset purchases announced by the European Central Bank (ECB) earlier today was larger than had been expected only a few days ago, but fears that it could fuel destabilising inflows to emerging economies seem overdone. … ECB QE and what …
22nd January 2015
Having been in tightening mode at the end of 2014, a number of EM central banks have surprised markets by loosening monetary policy since the start of the year, with policymakers in Romania, India, Egypt and Peru all cutting interest rates. With the drop …
16th January 2015
The value of EM exports fell in annual terms for the first time in almost a year in November as the slide in oil prices dragged on exports from energy producing EMs. The further slump in oil prices since then will put additional pressure on energy …
15th January 2015
In general our forecasts for both EM growth and inflation over 2015-16 are below consensus expectations and for the BRIC economies in particular we are notably more downbeat than the rest of the market. But there are a few countries, mainly in Asia, where …
14th January 2015
Since the end of November, the renminbi has depreciated slightly against the US dollar. However, the real effective exchange rate of China’s currency has continued to appreciate sharply, as the renminbi has strengthened against most other currencies. …
13th January 2015
The sharp fall in oil prices will provide a welcome boost to growth in the majority of emerging economies in 2015, but at the cost of slower growth in much of the Middle East and deepening crises in a handful of EMs, notably Russia and Venezuela. The net …
9th January 2015
The latest PMI data suggest that manufacturing activity across the emerging world was steady, but still relatively sluggish, at the end of last year. Manufacturers in some of the non-BRIC EMs, such as Mexico, continued to perform well supported by …
6th January 2015
The currencies of many emerging economies have sold off recently, due to general US dollar strength and, in some cases, declining oil prices. While our forecast that oil prices will remain low suggests that there is little scope for the currencies of oil …
18th December 2014
The turmoil in Russia and broader weakness in EM financial markets has brought a subdued end to the year. For 2014 as a whole, the latest data point to aggregate GDP growth of less than 5% for the third successive year. And it seems that the “new normal” …
16th December 2014
The slump in oil prices and renewed falls in EM currencies over the past month have rekindled fears over the outlook for emerging markets. In this Focus we outline the ten key issues that we think will shape the outlook for EM investors in 2015. … Ten key …
12th December 2014
Since the end of October, emerging market dollar-denominated corporate bonds have performed much worse than comparably-rated US corporate bonds. This has been the result of increasing credit spreads amid concerns that the significant rise in the …
11th December 2014
The recent modest recovery in EM exports stalled in October as global growth lost some momentum and sharp falls in commodity prices added to difficulties facing commodity exporters. More timely data suggest there has been no improvement in November. … …
10th December 2014
The sharp falls in EM equities over the past day or so have rekindled fears of a crisis across the emerging world. While several EMs do look vulnerable to the effects of low oil prices and a stronger US dollar, many of the headlines ignore the growing …
9th December 2014
An increase in external debt has raised concerns that the emerging world faces a rough ride over the coming years as the dollar strengthens. However, our updated Capital Economic Risk Indicator (CERI) suggests that a strong dollar is unlikely to trigger a …
8th December 2014
The US Fed is set to begin raising interest rates in the first half of next year, casting renewed uncertainty over the outlook for EM currencies. But big and necessary adjustments in many currencies have already taken place, and there is no guarantee Fed …
5th December 2014
The period of sluggish EM export growth over the past few years is only partly linked to the weak state of global demand. Another key factor is that the wave of globalisation over the previous decade, which pushed up trade flows, has come to an end. As a …
4th December 2014
The latest PMI data suggest that manufacturing activity across the emerging world has improved in recent months, supported by a pick-up in some of the smaller EM economies. That being said, EM manufacturing growth is still relatively sluggish. … Smaller …
3rd December 2014
Our GDP Tracker suggests that having sunk to a five-year low in August, EM growth edged up a little in September. The pick-up appears to have been driven by smaller EMs in Central Europe and Asia. In contrast, growth in the larger BRIC economies has …
28th November 2014
Policymakers in several EMs – notably China – have surprised the markets with unexpected rate decisions over the past month or so. In this Update we identify the EM central banks that are most likely to spring further surprises in the months ahead. In …
26th November 2014
There is little reason to think that the decision by the People’s Bank of China to lower interest rates will trigger a spate of copycat responses from other EM central banks. China’s capital account is closed, so the impact on flows to and from other EMs …
24th November 2014
Monetary policy is heading in differing directions across the emerging world. Several economies in Central and Eastern Europe, Asia (notably China) and Latin America have lowered interest rates in recent months and are likely to keep policy supportive for …
The Bank of Japan’s decision to boost asset purchases just as the ECB edges towards QE has rekindled concerns about negative spillovers from developed world monetary policy to the emerging world. The evidence that QE fuels global capital flows is weaker …
21st November 2014
Recent falls in commodity prices have left some emerging market (EM) economies in a tailspin. The S&P GSCI, an index of commodity prices, has fallen by more than 20% since its June peak, largely due to declines in oil and agricultural prices. All other …
20th November 2014
The performance of equities has been lacklustre in emerging markets since the end of September and noticeably worse than in developed markets. As a result, the return so far this year from the MSCI Emerging Markets Index in dollar terms has been less than …
13th November 2014
There are encouraging signs that the credit bubbles that had been building in a handful of major EMs are now deflating. But this process has only just begun – and the modest slowdown in credit that we’ve seen so far has already had a marked impact on GDP …
EM export growth picked up in September, continuing the sluggish recovery seen since the start of this year. However, the improvement remains concentrated in a handful of EMs, with commodity producers in particular still struggling. What’s more, more …
12th November 2014
Having slowed sharply in the first half of the year, consumer spending across the emerging world has continued to weaken in recent months. Among the regions, Emerging Asia is the only place where consumption growth appears to be stabilising. … Emerging …
6th November 2014
October’s PMI data suggest that EM manufacturing growth stabilised last month. Some of the smaller, export-driven EMs, particularly those in Central Europe as well as Mexico, are performing well. But manufacturers in parts of Asia appear to have lost …
4th November 2014
Our GDP Tracker suggests that EM growth slowed to a five-year low of 4.1% y/y in August, due in large part to a further downturn in the BRIC economies. Preliminary data suggest that growth may have stabilised in September, but this is unlikely to do much …
30th October 2014
Most of the emerging world should take the end of QE3 in its stride. The link between QE and capital flows to EMs has often been exaggerated. And while some EMs look vulnerable as US rates move up, it’s far more likely that growth in the major EMs will be …
29th October 2014
Although the US economy has emerged as a bright spot of the uneven global recovery, its imports from EM economies have not picked up anywhere near as much as would have been expected based on past form. It is now a familiar story, but it is commodity …
24th October 2014
We estimate that the recent fall in commodity prices could knock 1%-pt off Emerging Market (EM) inflation over the coming months. With slower economic growth set to keep a lid on core inflation in most countries, the emerging world looks set for a …
22nd October 2014
In simple terms, the big winners from the recent drop in oil prices will be those EMs with large energy import bills, while the big losers will be the major oil exporters. But in reality the situation is more complex. The drop in oil prices, while …
15th October 2014
Although EM export growth slowed in August, the general trend since the middle of the year has been one of improvement and more timely figures suggest that the recovery resumed last month. However, a closer look at the data shows that the recovery has …
14th October 2014
Industrial production (IP) growth in the emerging world is very weak. In aggregate terms, EM output grew by just 2.0% y/y in August – the slowest rate of growth since the global financial crisis. The aggregate figure masks big differences between regions. …
10th October 2014
Local currency government bonds in developed economies have typically fared much better than those in emerging economies over the past year. This is evidenced by the fact that the yield of the JP Morgan GBI Broad Index of developed market bonds has fallen …
9th October 2014
For all the recent talk of a “great moderation” in EM growth, the uncomfortable truth is that the big slowdown in the emerging world actually occurred several years ago. More recently, growth has in fact been remarkably stable. Given the structural nature …
8th October 2014
September’s manufacturing PMI data suggest that the sector has lost some steam across the emerging world. The recent weakness has been largely concentrated in the BRIC economies, although there were further signs of a slowdown in Emerging Asia too. By …
3rd October 2014
Investors have started to face up to the prospect that previous hopes of a significant rebound in EM growth are likely to be disappointed. But while the new normal for EM growth is going to be much weaker than in the past decade, there are several bright …
1st October 2014
Our GDP Tracker suggests that EM growth has slowed once again in recent months. The latest slowdown has been concentrated in Latin America and Emerging Europe, but there are some signs that growth has started to weaken in parts of Asia too. All of this is …
30th September 2014
As the Fed moves towards a first interest rate hike, the Capital Economics Risk Indicator (CERI) shows that financial risks are at a decade low. As such, a systemic emerging market (EM) crisis seems unlikely. Nonetheless, one or two countries, notably …
26th September 2014
The sell-off in emerging market currencies so far this month has been broad-based, but we expect investors to become more selective soon. We think a number of currencies will probably rebound, while the currencies of economies with large current account …
25th September 2014
Major oil producers in the Gulf stand to lose the most in absolute terms from the recent fall in prices, but conservative management of the oil sector means that the region will simply save less. By contrast, the governments of many oil producers …
22nd September 2014
Concerns that the policy tightening implied by the latest Fed forecasts would eventually lead to higher US Treasury yields and hinder EM growth are probably misplaced. A handful of EMs are vulnerable to tightening global monetary conditions. But, …
18th September 2014
We are often asked whether the next big move in EM interest rates will be up or down, but in truth the sheer diversity of the economies within the emerging world renders any “one-size-fits-all” rule next to useless. In this Update, we split EMs into four …
17th September 2014
Emerging market (EM) currencies have had a rough ride recently, adding to what was already shaping up to be a poor year. Our synthetic EM exchange rate index is down by 1.5% against the dollar in the past month and by 5.5% since the start of the year as …
16th September 2014
There are good reasons to think that some EM currencies remain exposed to market turbulence as we move towards the first interest rate hike in the US. However, suggestions that the recent falls in EM currencies against the dollar are due to concerns about …
12th September 2014
