Filtered by Region: Emerging Markets Use setting Emerging Markets
Factories are slashing prices of consumer goods Core inflation has recovered somewhat in recent months, even as headline inflation has slipped back into negative territory. But the outlook for underlying inflation is still deteriorating, with the producer …
11th May 2025
Fiscal slippage appears more likely across SSA Leaders across Sub-Saharan Africa faced with fiscal strains are increasingly embracing tax reform rather than rises. Banking on the former to quickly raise revenue is ambitious and we think this risks further …
9th May 2025
The strong showing for far-right nationalist, George Simion, in the first round of Romania’s Presidential election on Sunday has deepened the country’s political crisis, and the fallout in Romania’s financial markets could get more messy in the coming …
Tariffs aren't the only headwind facing exporters The US-China trade talks taking place in Geneva this weekend could pave the way for a partial rollback in tariffs. Trump has continued to rule out doing so without anything in return. And China’s …
The trade data available for March and April suggest that a large number of EMs have benefitted from a front-running of tariffs in recent months, particularly those across Asia (Taiwan, Vietnam and India). That said, business surveys have weakened, …
8th May 2025
Brazil’s current account deficit has widened sharply over the past twelve months and we think it could reach 4.0-4.5% of GDP over the next couple of years. This leaves the real vulnerable to renewed falls, especially if concerns about the health of the …
Inflation rises, but Banxico still on course for a 50bp cut next week Mexico’s headline inflation rate edged up to 3.9% y/y in April, but we think that the challenging growth outlook and the relative resilience in the peso leave the door open for another …
Copom hikes again, but tightening cycle near an end (if not already over) Brazil’s central bank hiked the Selic rate by a further 50bp, to 14.75%, today and officials made clear in the accompanying statement that the tightening cycle is near an end. We …
7th May 2025
NBP cuts by 50bp ... but easing cycle may be more limited than most expect The decision by the National Bank of Poland (NBP) to cut its policy rate by 50bp today, to 5.25%, rather than opt for a smaller 25bp cut, suggests a slightly more dovish balance on …
CNB cuts by 25bp, but easing cycle may now be over The Czech National Bank (CNB) cut its policy rate by 25bp today, to 3.50%, but we think that this may mark the end of its easing cycle. Our forecast for the policy rate to remain on hold at 3.50% over the …
Chinese policymakers will probably find ways to keep the published unemployment rate close to their “around 5.5%” target for this year. But this may mask broader weakness in the labour market as a downturn in exports reduces new hiring, increases …
Simion’s lead leaves Romania on the verge of a big political shift Far-right candidate George Simion emerged as the clear frontrunner in the first round of Romania’s rescheduled presidential election and is now the favourite to win the second round on 18 …
5th May 2025
SA 2025 Budget: fiscal slippage is coming South Africa’s 2025 Budget will be tabled for a third time later this month and, to be approved, we think the ANC and DA will need to agree on some spending cuts, although it probably won’t be enough to avoid some …
2nd May 2025
Additional fiscal easing may be needed before long Our China Activity Proxy published earlier this week showed that China’s economy slowed in Q1, growing by just 3.9% y/y. That’s despite the fact that the trade war with the US was only just getting …
Russia’s economy may be starting to break ... The latest economic data released out of Russia have given clear signals that growth has slowed sharply, with GDP having potentially contracted outright in q/q terms in Q1. We had expected a slowdown to …
Exporters relatively well-placed to benefit US Treasury Scott Bessent said this week that “India would be one of the first trade deals we [the US] would sign”, brightening the prospects of India avoiding large tariffs once the 90-day reprieve comes to an …
The prospect of a flood of low-cost Chinese exports to African shores may help those economies suffering from high inflation but it risks undermining the growth of domestic industry. Governments in the likes of Nigeria, with a history of employing …
1st May 2025
This is a revamped version of our quarterly Financial Risk Monitor to include commentary and analysis of our latest EM risk indicators. Currency vulnerabilities remain near multi-year lows, large deficits leave the public finances in poor shape Higher US …
30th April 2025
A robust monsoon this year – as predicted by experts – wouldn’t have as big an impact on India’s economy as it would have had a couple of decades ago. But it could boost employment and energy production. What’s more, it would anchor prices of key crops …
This Rapid Response has been amended from our original response to correct the food CPI figure. Fall in inflation paves the way for May rate cut The larger-than-expected fall in Polish inflation, to 4.2% y/y, in April, is probably enough to tip the …
Hungary contracts ahead of tariff impact The Q1 GDP data released out of Hungary and Czechia showed that momentum in both economies slowed at the start of this year, with Hungary suffering a renewed contraction. The risks to our below consensus full-year …
China Chart Pack (Apr. 25) …
29th April 2025
This Update answers five key questions on Romania’s rescheduled presidential election, the first round of which takes place on Sunday 4 th May. A victory for far-right frontrunner George Simion would likely raise concerns about the country veering away …
Our China Activity Proxy calls into question the consensus view, based on the official GDP figures, that China’s economy remained resilient at the start of this year. Despite some improvement in March, the CAP suggests that growth last quarter slipped …
MNB to stay on hold as above-target inflation persists The Hungarian central bank (MNB) left its base rate on hold today, at 6.50%, and despite downside risks to activity from US tariffs, we think its easing cycle will remain on pause throughout 2025. …
Sentiment holds up well in the face of Trump’s tariffs The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) provide a tentative sign that the impact of US tariffs on the region has been fairly contained so far. The …
Provided it was limited just to Kashmir, a period of fighting between Pakistani and Indian forces would have a small impact on the overall economy of either country. The closing of the only land trade route is also largely symbolic – bilateral trade was …
28th April 2025
US import tariffs have largely focused on China. For some EMs (such as India and South East Asia), this creates near-term opportunities to take US market share from China. But there will be offsetting effects if confidence has been hit. And EM commodity …
Mexico is well positioned to benefit if punitive US tariffs on China prompt a shift in US import demand towards other EMs, as seems likely, although its ability to ramp up exports in the near term will be constrained by some capacity constraints, …
SA 2025 budget closer, but fiscal slippage coming South Africa’s 2025 budget took a vital step forward after the Treasury scrapped its proposed VAT hike this week. With the DA also recommitting to the GNU, this will provide some of the certainty that the …
25th April 2025
The US steps up its peace deal efforts The US has been pushing harder over the past week to achieve a peace deal that Russia is willing to accept. But the more concessions that are offered to Putin, the less willing Ukraine is likely to be on board with a …
Inflation rises but end of tightening cycle is near The further rise in Brazil’s headline inflation rate to 5.5% y/y in the first half of April means that Copom will press ahead with a 50bp hike in the Selic rate at its next meeting in early May. But …
China continues to rebuff Trump Earlier this week, President Trump gave the clearest indication yet that he is keen to row back tariffs on China, which he said would “come down substantially”. But, for now at least, the White House has ruled out doing so …
CBR drops tightening bias, rate cuts likely in Q3 The Central Bank of Russia (CBR) left its policy rate on hold at 21.00% again today and dropped the language in its statement that further interest rate hikes are possible. With inflation nearing a peak, …
Trump policies may be levering India towards US US Vice President JD Vance hailed “very good progress” on a potential trade deal between Washington and New Delhi during his visit to India this week, and prospects do appear to have brightened with the two …
Leadership signals policy flexibility in the face of trade uncertainty The Politburo has just concluded its April meeting which, as usual, focused on economic affairs. The communique signalled that monetary policy easing is still on its way and that …
Emerging Markets Capital Flows Monitor (Apr. 2025) …
24th April 2025
Our View: The economies of Central and Eastern Europe are generally less exposed to higher US tariffs than other EM regions, but we have still become more concerned about the hit to growth this year from US trade protectionism. Alongside signs that wage …
Inflation rises, but Banxico more focussed on weak economy The rise in Mexico’s headline inflation rate in the first half of April, to 4.0% y/y, is unlikely to shift Banxico’s focus away from the weakness of the economy and we expect it to deliver another …
The larger-than-expected fall in South Africa’s headline inflation rate to 2.7% y/y in March will give the Reserve Bank more confidence that its easing cycle can resume. We expect a 25bp reduction to 7.25% at the next MPC meeting in May followed by a …
23rd April 2025
Retail sales in China are more than ten times larger than the country’s exports to the US. As such, domestic goods consumption would only need to rise by a few percent over the next couple of years to fully offset the hit from US tariffs. But this would …
22nd April 2025
Odds of a May rate cut shorten The weaker-than-expected Polish industrial production and wage data for March have increased the probability that the central bank (NBP) will restart its easing cycle at its next meeting in May, but that decision will still …
Pharmaceuticals tariffs incoming A US import levy on pharmaceuticals would be a blow to India’s economy but far from a fatal one. Admittedly, India has been dubbed the “pharmacy of the world” and its success in the industry has helped its pharmaceuticals …
17th April 2025
CBRT hikes rates amid significant capital outflows Turkey’s central bank (CBRT) delivered a hawkish surprise in raising its one-week repo rate to 46.00% today. While this won't tighten monetary conditions, it does formalise the tightening delivered …
SARB’s inflation uncertainty may be falling The SARB’s Monetary Policy Review (MPR) published this week set out plenty of upside risks to inflation. But it looks like some of the risks from VAT hikes and tariffs have diminished, which could give the SARB …
CBRT signals tight policy here to stay The decision by the Turkish central bank (CBRT) to hike its one-week repo rate by 350bp, to 46.00%, formalises the emergency monetary tightening delivered last month and is a strong signal of commitment to a tight …
The Spring Meetings of the World Bank and IMF take place next week under the cloud not just of US trade protectionism but also the Trump administration’s seeming hostility towards multilateral institutions – and the threat of US withdrawal. An end to (or …
The February activity figures out of South Africa showed that the economy was struggling even before the added headwind from US import tariffs. But while there are downside risks to growth, we still believe a combination of easing loadshedding and …
16th April 2025
The extremely high US import tariffs imposed on China will likely strengthen the forces that have driven multinational corporates to shift production for the US market away from China and towards other EMs in recent years. Those EMs with spare capacity in …
Africa Chart Pack (Apr. 2025) …
