Filtered by Subscriptions: Emerging Markets Economics Use setting Emerging Markets Economics
Our financial conditions indices show that conditions remain loose by historic standards in most EMs. The key exception is Latin America, where conditions have tightened sharply this year due to rising interest rates and fiscal risks. This could pose a …
13th September 2021
The pandemic is likely to inflict lasting damage on potential growth in economies in much of Latin America, Africa and South and Southeast Asia, adding to the structural headwinds that they already faced. However, the risk of permanent scarring in many …
9th September 2021
The combination of large foreign-currency debt burdens, low FX reserves and weakening currencies means that the risk of sovereign defaults in Sri Lanka and Tunisia is growing. Elsewhere, China’s largest property developer, Evergrande, appears to be close …
With external positions in decent shape in most major EMs, the macroeconomic fallout from any tightening of external financing conditions should be limited. But there are a handful of EMs which look vulnerable. Turkey remains the key one, but risks are …
2nd September 2021
The EM manufacturing PMIs for August suggest that virus disruptions and supply chain constraints held back output in much of Emerging Asia. Manufacturing slowed in most other EMs too, although there were at least early signs in Emerging Europe that …
1st September 2021
We think slower growth in China will continue to weigh on the country’s stock market, as well as those of some other emerging markets (EMs). This month’s activity data out of China emphasised how the country’s economy has continued to slow. The latest …
27th August 2021
Most economies in Emerging Europe and Latin America look set for a strong third quarter and, while the near-term outlook for Southeast Asian economies remains challenging, high-frequency mobility provide early signs that at least parts of the region are …
25th August 2021
Having surged over the past year or so, EM exports appear to be peaking as final demand is levelling off and commodity prices are dropping back. That said, exports will likely remain at elevated levels for some time yet. Our seasonally-adjusted measure of …
23rd August 2021
Net capital out flows from major emerging markets have picked up sharply over the past couple of weeks, driven by virus concerns, growing expectations that the Fed will begin tapering asset purchases this year as well as falls in commodity prices. But …
20th August 2021
Several EM central banks have continued to tighten monetary policy over the past month or so in response to strong reopening rebounds ( Chile , Czech Republic , Hungary ) and/or rising inflation concerns ( Brazil , Mexico, Peru , Russia ). A few others, …
18th August 2021
Five years ago this October, we published a piece arguing that the “golden age” for emerging markets had ended and that they were entering a period of permanently weaker growth. Since then, many of the structural problems that we anticipated have begun to …
The disbursement of Special Drawing Rights (SDRs) from the IMF later this month is a boon for some Frontier Markets that face very high borrowing costs. But beyond this, it is hard to find many positives for Frontiers. The spread of the Delta variant, …
10th August 2021
The rapid spread of the Delta variant of the coronavirus adds to reasons to think that lacklustre economic recoveries lie in store for tourism-dependent economies in Africa, parts of the Middle East and South-East Asia. The weakness of tourism also …
4th August 2021
The $650bn allocation of IMF Special Drawing Rights (SDRs) that was finally signed off by the IMF yesterday should provide welcome relief to some frontier markets such as Ghana and Kenya that still face very high foreign borrowing costs. But it won’t …
3rd August 2021
June’s PMIs show that virus outbreaks have weighed on manufacturing in Southeast Asia while supply bottlenecks and weaker demand created headwinds for industry in China. In contrast, Indian industry rebounded sharply and manufacturing recoveries continue …
2nd August 2021
While the pandemic continues to hold back recoveries in Southeast Asia, the near-term outlook appears brighter in Emerging Europe and Latin America. However, low vaccine coverage in the latter means that economies remain susceptible to renewed outbreaks …
30th July 2021
Table of Key Forecasts Overview – Low vaccine coverage means that the threat to economic recoveries from the highly-contagious Delta variant is much larger in the emerging world than in developed economies. And EMs will take longer to return to their …
29th July 2021
After surging over the past year, the latest data provide signs that EM goods exports have now passed their peak. However, they are still likely to stay at elevated levels for some time yet. Our seasonally-adjusted measure of aggregate EM goods exports …
21st July 2021
The spread of the Delta variant of COVID-19 poses a much bigger risk to economic recoveries in emerging markets than in developed markets. India, South Africa, and South East Asia have suffered already or are suffering. And limited vaccine coverage in …
20th July 2021
Falling virus cases, strong economic recoveries and/or inflation worries prompted several more EM central banks – those of Czechia , Chile , Hungary and Mexico – to tighten monetary policy in the past month, joining Russia and Brazil. And a few others, …
15th July 2021
Net capital outflows from emerging markets have picked up over the past month following the Fed’s more hawkish turn at the FOMC meeting in early June. Outflows may intensify over the coming months, but the macroeconomic fallout in the major EMs should be …
14th July 2021
Budget deficits have narrowed from their 2020 peaks across the emerging world. The improvements in Brazil and Argentina – where deficits appear to be narrower than their pre-pandemic levels – provide welcome relief given both countries’ debt troubles, but …
8th July 2021
With the (usual) exception of Turkey, the strong rates of credit growth seen in some EMs including Brazil and Korea are unlikely to be sustained as policymakers have already started (or will soon turn to) tightening policy. The bigger concern is the …
6th July 2021
The PMIs for June show that manufacturing strengthened in most of Emerging Europe, but virus outbreaks, supply chain disruptions and a softening of demand created headwinds for industry in Asia. One common theme is that supply shortages persist, which is …
1st July 2021
We think investors may be overestimating how much monetary policy tightening is on the way in emerging markets (EMs), but still expect long-dated EM government bond yields to rise a bit from here. Over the past month the tightening cycle among EM central …
29th June 2021
The next EM central banks likely to raise interest rates are those whose economic recoveries are relatively advanced and can focus on inflation and/or financial risks. Chile and Korea fit into this group and we expect rate hikes from both in August. …
28th June 2021
EM goods exports have surged in Q2. There are some early indications that EM exports will now come off their record highs, but they are still likely to stay at elevated levels throughout the rest of the year. Our measure of EM goods export values rose for …
24th June 2021
For EMs, vaccine supply appears to be by far the biggest constraint on immunisation campaigns; vaccine hesitancy will probably rear its head at a much more advanced stage of rollout in most countries. And even then, governments seem to be having some …
23rd June 2021
The latest data suggest that the Central European and some Asian economies will probably post strong GDP growth in Q2, but virus outbreaks have weighed on recoveries in India and parts of Latin America. High-frequency mobility data paint a mixed picture …
22nd June 2021
Inflation has risen sharply across the emerging world in the last few months, prompting much more cautious words from central banks (mainly in Latin America and Emerging Europe), but we expect that EM price pressures will ease in the coming months. (See …
18th June 2021
By September, China could be in a position to export 340mn vaccines doses each month – more than most regions of the world have administered in total so far. China’s vaccines are less effective than others, but have been found to suppress outbreaks where …
17th June 2021
The broad-based rise in inflation across EMs this year has elicited varying degrees of policy responses from central banks. Those facing above-target inflation and most worried about credibility (Brazil, Russia) have already started hiking rates and will …
16th June 2021
Growing political turmoil in Latin America over recent weeks has raised concerns about public debt, though vulnerabilities are most likely to crystallise over the medium term. Meanwhile, EM currency and banking sector risks are largely centred on Turkey, …
10th June 2021
Net capital outflows from emerging markets have eased over the past few weeks and Turkey and India (which suffered large outflows in April and May) have started to see renewed in flows. Even if outflows pick up again, the fallout in the major emerging …
9th June 2021
Supply-related price pressures are building, particularly in Central Europe and parts of East Asia. And while the factors behind this should prove temporary, output gaps in the most-affected countries are also set to close more quickly than in other EMs. …
Emerging markets as a whole will increase their share of global GDP over the coming decades, with the largest expansions likely to come in EMs with rapid population growth (sub-Saharan Africa), those with manufacturing sectors that can drive productivity …
3rd June 2021
Markit’s aggregate emerging market manufacturing PMI dropped back in May as new virus waves took a toll on some countries, notably India, although they suggest that the manufacturing recovery in Central and Eastern Europe (CEE) continued strongly. …
1st June 2021
We forecast that emerging market (EM) equities will make further gains between now and end-2022 as the global economy recovers further. However, they have lost a bit of ground to developed market (DM) equities recently and we doubt they will perform much …
27th May 2021
EM exports are set to hit a new high in Q2, which will help to support economic growth, particularly in East Asia where virus cases are hitting domestic economies. While EM exports are likely to come off their current highs, they will probably stay at …
High-frequency data suggest that economies in Emerging Europe and parts of Latin America are over the worst of their latest virus outbreaks, but the worrying surge in virus cases in some Asian economies has hit activity. While more targeted restrictions, …
Remittances into EMs were surprisingly resilient last year and should continue to hold up over the coming quarters. The outlook is strongest in Mexico and parts of South East Asia, due to the recovery prospects for the US economy. In contrast, the risk of …
25th May 2021
Extended delays to vaccine supply from India to the Covax facility will keep rollout in many Frontier Markets stuck in first gear. Social distancing measures will have to stay in place for longer, holding back economic recoveries, and the risk of renewed …
21st May 2021
The severe waves of COVID-19 that afflicted Emerging Europe and Latin America earlier in the year are now subsiding and the near-term economic outlook there has brightened. But several Asian economies have become the focus of concern instead. India …
19th May 2021
The rise in global agricultural prices in recent months has sparked concerns about a surge in EM food inflation. While it would be remiss to dismiss these, we think the impact may not be as severe as feared because, crucially, domestic conditions tend to …
The major oil producers have seen the biggest gains in exports from the rally in commodity prices this year, although most of this windfall is likely to be saved which will limit the boost to economic recoveries. We expect that commodity prices will fall …
14th May 2021
High-frequency data suggest that outflows from India’s bond and equity markets have picked up in recent weeks as the country’s COVID-19 outbreak has worsened. At an aggregate level, though, outflows from EMs were moderate at the start of this month and, …
12th May 2021
While the high numbers of COVID-19 cases will drag on the recovery in many in EMs in Q2, there are – at least outside India – encouraging signs that the worst of the current waves may be over in most places. But so long as vaccine coverage remains low, …
6th May 2021
The impact of India’s COVID-19 crisis on other EMs through normal economic channels such as trade and financial links should be manageable. The more serious impact will come through delays to vaccine rollouts, particularly for countries in South Asia and …
5th May 2021
Markit’s EM PMI rose to a four-month high in April, but manufacturing sectors are likely to enter a softer patch in places facing large virus outbreaks. Meanwhile, supply chain disruptions are causing price pressures to build in parts of Asia and Central …
4th May 2021
The economic data for Q1 across many EMs look reasonably strong, but the latest COVID-19 outbreaks and the reintroduction of containment measures in some countries will weigh on underlying growth in Q2. The key exception is China, where activity should …
30th April 2021
