Filtered by Subscriptions: Emerging Markets Economics Use setting Emerging Markets Economics
The Egyptian central bank has announced steps to tackle its economic crisis, including a large devaluation and a bumper interest rate hike. But will it be enough? Economists from our Emerging Markets team held this special 20-minute briefing on whether …
6th March 2024
The green transition will deal a significant blow to EM oil producers that have failed to save their windfalls (Nigeria, Colombia, Angola), but boost the export revenues of economies such as Chile and South Africa that are endowed with the raw materials …
4th March 2024
The pick-up in the EM manufacturing PMI last month suggests that EM industry continued to strengthen in Q1. But while manufacturers have benefitted from strong demand in some economies (such as India, Turkey and Russia), the overall picture is that it …
1st March 2024
Aggregate EM growth softened towards the end of last year and we think it will remain weak in 2024. But there will be divergence at the country level with growth slowing in those economies that outperformed in 2023 and growth picking up in last year’s …
29th February 2024
Almost all major emerging market (EM) currencies have fallen against the US dollar so far this year, and we think they will remain under pressure until interest rate expectations in the US shift lower again. EM currencies have been no exception to the …
21st February 2024
EM sovereigns have issued a record amount of FX debt at the start of this year, capitalising on a window created by the decline in US Treasury yields since October. The issuance has been concentrated among highly rated sovereigns and borrowing does not …
20th February 2024
Capital inflows into EM bonds and equities have fallen sharply since January after the Fed pushed back expectations of the timing of rate cuts. The good news is that current account deficits in EMs have narrowed over the past year, meaning many EMs have …
14th February 2024
A key point that stands out from the raft of EM central bank decisions over the past couple of weeks is that policymakers are focussed much more on domestically-generated price pressures than the Fed. We expect a pivot towards monetary easing in the …
12th February 2024
We think that EM equities will deliver better returns in the next couple of years than they have since the pandemic. Returns are likely to be lower than those we expect from US equities but similar to those from other DM equities. We expect equities in EM …
9th February 2024
While the overall incidence of sovereign debt distress in the emerging world has fallen back since last year, sovereign debt distress in frontier markets hasn’t. And, if anything, things have taken a turn for the worse in recent weeks in some of the more …
7th February 2024
While the emerging market manufacturing PMIs for January generally edged up, we think that weak global demand will weigh on EM industry over the coming months. The good news is that price pressures remain in check, supporting our view that the EM easing …
1st February 2024
The EM monetary easing cycle began to broaden out late last year. Mexico’s central bank will probably be the next to cut rates later this quarter, and many Asian central banks will join the fray in April and May, which is sooner than most expect. India is …
29th January 2024
This is a special Global Economics Chart Pack that provides clients with key analysis to make sense of the macro and market impact of the disruptions to maritime shipping. The charts in this document come from our brand-new shipping dashboard , which …
25th January 2024
Wage growth remains soft across much of Emerging Asia, supporting our view that the region’s central banks will start monetary easing cycles sooner than most expect. Wage pressures have softened elsewhere in the emerging world in recent months, although …
EM GDP growth weakened over the second half of 2023, and we expect growth to remain subdued this year. Some EMs that underperformed last year will see modest recoveries, but many of the economies where growth was surprisingly strong last year will slow by …
23rd January 2024
Capital inflows into EM bond and equity markets have eased off a little recently, but they are still running around their highest level in over three years. And taken together with the narrowing of current account deficits over the last year, it suggests …
18th January 2024
The incidence of sovereign debt distress has fallen sharply across the emerging world in the last few months, but that doesn’t rule out the possibility of default in a handful of EMs. Tunisia looks most likely to do so, followed by Argentina and Ecuador, …
16th January 2024
Aggregate EM GDP growth is set to slow in 2024, but as important as the overall story is understanding the different cycles that are playing out at a country level. We think some countries that performed surprisingly well last year (notably Mexico and …
9th January 2024
Given the thick smog covering parts of South Asia, forcing schools to shut down and disrupting activity, this Update takes a closer look into the economics of air pollution. Air pollution is mostly caused by the burning of fuels and biomass, vehicle …
8th January 2024
The past 12 months have seen marked divergence in growth across emerging markets economies, as well as the start of easing cycles among some of their central banks. How much will these trends continue into 2024? Economists from across our Emerging Markets …
2nd January 2024
The emerging markets manufacturing PMIs for December were a mixed bag. The headline index stagnated at the aggregate EM level and remained below 50 in over half of the countries in our sample . Price pressures still seem to be easing, albeit at a slower …
The more supportive global risk environment is helping to ease some financial strains across the EM world, but there are still pockets of vulnerability heading into 2024. Balance of payments positions are fragile in Turkey and Tunisia. Public debt risks …
19th December 2023
EM GDP growth has started to weaken, and we expect activity to enter a slower phase over the coming quarters. While some economies that underperformed this year will start to recover, many of the EMs that fared surprisingly well in 2023 will slow by more …
15th December 2023
Table of Key Forecasts Overview – Aggregate EM GDP growth will enter a slower phase over the coming quarters. But the headline figure masks an unusually large variation in prospects at a country level. Many of the EMs that fared surprisingly well in 2023, …
12th December 2023
The extension of climate-related financing by the IMF to vulnerable emerging market economies (EMs) demonstrates how the Fund is factoring in macroeconomic and financial stability risks stemming from climate change to its policy work. While these packages …
11th December 2023
A stand-out feature of the emerging world in 2023 has been the extent to which economic cycles have diverged. Divergence is likely to be the name of the game in 2024 too. We think some countries which have performed surprisingly well this year (e.g. …
7th December 2023
We held two online Drop-In sessions today to discuss the outlook for 2024 and the risks to our forecasts. (See a recording here .) This Update summarises the answers to several of the questions that we received. Are there recessions coming in advanced …
5th December 2023
Inflows into EM bond and equity markets have picked up over the past month, particularly in Turkey where optimism around the policy U-turn seems to be building. Capital flows into EMs may be bumpy in the very near term as global growth disappoints, but …
The emerging market manufacturing PMIs for November were a mixed bag – although most headline indices edged up, they remained below 50 in over half the countries that we track, largely due to weak external demand. But price pressures did ease across the …
1st December 2023
In this Global Economics Update , we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary policy mean that the biggest risks relate to central …
30th November 2023
Next year is one of the busiest ever in the EM electoral calendar, with votes taking place in countries accounting for over a third of EM GDP. The upcoming votes will have important implications for geopolitics and, potentially, global supply chains …
29th November 2023
Following a temporary reversal in Q3, EM inflation has started to fall again in the last few months. While this is set to continue, we think it marks the start of a second phase in the EM disinflation process – one that will be characterised by a much …
27th November 2023
Emerging Markets Chart Pack (November 2023) …
21st November 2023
In our flagship report on the neutral interest rate (r*), we argued that r* in developed markets will rise and be higher than is widely assumed. (The full report can be accessed here .) For most EMs, r* is also likely to be higher (with China being a …
20th November 2023
Sovereign debt risks across Frontier Markets have eased slightly since last quarter. But dollar-bond spreads in Ethiopia have jumped following its request for debt-service suspension earlier this week. And we think that the risk of default over the coming …
16th November 2023
During the past decade, the global economy has transitioned out of an era in which globalisation was the key driver of economic and financial relationships into one shaped by geopolitics. Previously, most governments had believed that closer economic …
We think that bonds in Emerging Markets (EMs) will struggle in the next couple of months. Further ahead, though, we expect their yields to fall, as both “risk-free” rates and spreads drop. The yields of EM local-currency and dollar-denominated bonds have …
15th November 2023
Flows out of EM bond and equity markets have eased since early October, but we think the recent dollar weakness which has helped to support capital flows into EMs is unlikely to continue. The good news is that current account deficits have narrowed in …
10th November 2023
Higher profitability has helped to boost EM banks’ financial positions over the past year and reduced the tail of weak banks that might struggle to cope with rising loan losses on their balance sheets. The overall EM picture looks strong, but pockets of …
7th November 2023
Most EM manufacturing PMIs for October were weaker than expected, largely driven by sluggish domestic and external demand. This weakness has, at least, resulted in input and output price components dropping back, which supports our view that the EM easing …
2nd November 2023
The AI revolution will make EM income convergence – or “catch-up growth” – harder as richer economies are better equipped to deploy the technology on a wide scale. It poses a particular headwind to the services-driven economic development path pursued by …
There has been a broad-based fall in foreign direct investment flows into the emerging world that, outside China, is mostly the result of a slowdown in global growth. FDI flows should stabilise over the coming year and, over the medium term, we think they …
1st November 2023
Higher bond yields will add to fiscal pressures in those EMs with particularly large public debt burdens and weak debt dynamics. Brazil, South Africa as well as Colombia and Mexico are the EMs from our analysis whose fiscal positions are the most …
26th October 2023
EM GDP has held up well this year, but we expect growth to disappoint in the coming quarters. Inflation has surprised to the upside recently, which will delay the start of interest rate cutting cycles in some places. But we still expect easing cycles to …
19th October 2023
Aggregate EM goods exports have struggled for momentum in recent months and, while there were more positive signs from some of the timely September trade data, we think that exports are likely to struggle as demand in advanced economies weakens. That …
18th October 2023
We’ve long argued that EMs were well placed to weather the Fed’s tightening cycle and episodes of rising US Treasury yields – and that has largely been borne out. And, as it happens, the latest sell-off in global bond markets has started to reverse over …
11th October 2023
Flows out of EM bonds and equity markets have intensified in recent weeks amid the sell-off in global bond markets, and an escalation of the conflict between Israel and Gaza would exacerbate this further. Nonetheless, the narrowing of current account …
10th October 2023
Rising food prices have already led to upside inflation surprises in parts of Asia, and central banks in the region are likely to ease policy later than their EM peers. But inflation should eventually resume its downward path and, once it does, policy …
5th October 2023
The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous financial crises that have been caused by sharp moves in …
4th October 2023
