The raft of EM CPI figures out this week show that headline inflation is, in aggregate, finally starting to fall significantly, and we expect it to decline further in the coming months. But core inflation is easing relatively slowly, and remains worryingly strong in most of Latin America and Emerging Europe. While those region’s central banks will be among the first globally to cut interest rates this year, monetary policy will probably be loosened more gradually than most are currently anticipating.
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