Filtered by Subscriptions: Emerging Markets Economics Use setting Emerging Markets Economics
Lingering fears over the impact of a tapering of asset purchases by the US Fed have seen emerging market currencies continue to weaken over the past month – countries with current account deficits have been among the hardest hit. Falling commodity prices …
18th July 2013
We think that the non-BRIC Emerging Markets (EMs) will play a more important role than the BRICs in driving a gradual acceleration of global GDP growth over the next 2-3 years. Within the EM world, the prospects for a strong economic rebound by 2015 …
15th July 2013
The latest batch of EM trade data suggests that exporters continue to struggle in the face of slowing demand from their major global trade partners. Moreover, there isn’t much in the forward-looking indicators to suggest that a meaningful recovery in …
11th July 2013
Yields of dollar-denominated emerging market government bonds have surged since late May, reflecting increases in both underlying US Treasury yields and credit spreads. But while Treasury yields have remained high in recent weeks, credit spreads have …
10th July 2013
Last week we published for the first time our forecasts for 2015 GDP growth in China, which put us right at the bottom end of consensus expectations. For the rest of the emerging world, the effects of weaker growth in China are likely to be felt most …
Emerging economies are much better positioned than in the past to withstand policy tightening by the Fed and few are at risk of an immediate crisis. Nonetheless, we are entering a new era for emerging markets (EMs) which will see old stars fade and new …
8th July 2013
There’s a vast amount of uncertainty about the potential for developing countries to follow the US and Canada in exploiting their shale reserves. But if they can, it could turn a large number of emerging markets from net gas importers to self-sufficiency. …
3rd July 2013
June’s PMIs suggest that the downturn in emerging market manufacturing is gathering pace, with our EM-wide PMI estimate dropping to its lowest level for nearly a year. Producers in Asia and Latin America seem to have borne the brunt of the slowdown, but …
2nd July 2013
While at first sight it does look like the recent falls in emerging market (EM) equities could cause growth to slow via “wealth effects”, we think there are only limited grounds for concern. … Market turmoil unlikely to cause EMs to slow via wealth …
28th June 2013
Our GDP Tracker suggests that the EM slowdown has continued into the start of Q2. Although all three main regions have reported disappointing growth, there are signs that the downturn in Emerging Europe may have finally bottomed out. … EM growth slows …
27th June 2013
We do not expect the tapering and eventual ending of QE by the US Fed to be the trigger for a systemic Emerging Market (EM) crisis. Our Capital Economics Risk Indicator (CERI) suggests that financial risks in EMs are low, with only Venezuela in immediate …
26th June 2013
Concerns about a tapering of the US Fed’s asset purchases under QE3 have caused a sell-off in EM financial markets, but we think the economic impact on EMs from the end of ultra-loose monetary conditions in the developed world is likely to be relatively …
21st June 2013
Yesterday’s FOMC meeting cemented expectations that the Fed will start to taper its asset purchases under QE3 later this year and has weighed on EM financial markets today, but the economic impact of Fed tapering on EMs is likely to be limited. A handful …
20th June 2013
Despite having experienced relatively rapid wage growth in recent years, there is little evidence that China has suffered a significant loss of export competitiveness. Instead, the EM region that has experienced the greatest loss of competitiveness over …
14th June 2013
Most EMs are likely to tolerate the recent sell-off in their currencies. In some places this may even be welcomed. But there are a few exceptions. Inflation concerns mean that currency weakness will put policymakers under pressure in Brazil and India, …
12th June 2013
The weakness of the global economy continues to keep export growth subdued across Emerging Markets (EMs). Even in Asia, where exports held up relatively well until very recently, growth in trade has weakened over the past few months. This only adds to …
Construction has started the year on a weak note across the emerging world and particularly in those EMs that most need to raise their investment rates, notably Brazil and Russia. This adds weight to our concerns that growth in these economies is set to …
6th June 2013
The 25% year-on-year rise in equity prices in advanced economies, combined with rising property prices in some countries, should provide a boost to household consumption. However, we suspect the benefit will be small in most cases, with the notable …
4th June 2013
High public debt and large budget deficits mean that the governments of Egypt, Jordan and Hungary need to tighten fiscal policy. Moreover, despite appearing healthy, the public finances of some commodity producers could come under pressure if commodity …
3rd June 2013
Our EM GDP Tracker suggests that growth in Q1 may have slumped to a three-and-a-half year low, having been hit by a dip in global trade and structural problems in the BRIC economies. … EMs continue to lose …
30th May 2013
Healthy demographics can certainly play a role in supporting growth in emerging markets. However, the future performance of places such as India, the Middle East and Africa, where demographics are likely to be most supportive of growth, will be mainly …
29th May 2013
In aggregate terms, EM monetary policy has been loosened over the past six months. But there has been a big difference between the actions of central banks in each EM region. In Europe and, more recently, Asia, interest rates have been cut in order to …
28th May 2013
The recovery in emerging market (EM) growth during the second half of 2012 has faltered since the start of this year. This is due in large part to renewed weakness in the BRIC economies, which we think reflects a transition to a new structurally slower …
23rd May 2013
Over-invoicing by exporters over the last five months has significantly inflated the apparent strength of overseas demand. While official customs data show a surge in exports, this is not evident in the imports reported by trading partners. China’s …
17th May 2013
This week’s bumper foreign debt sale by Brazil’s Petrobras has put the spotlight on the fast-expanding overseas market for EM corporate bonds. As it happens, this type of financing is still a small part of the overall universe of EM company debt. …
16th May 2013
Economic activity across the emerging world looks to have moderated since the start of the year, with our GDP tracker pointing to weaker growth in Emerging Europe, Emerging Asia and Latin America. Meanwhile, consumer price inflation remains subdued in …
15th May 2013
The latest trade data provide further evidence that Emerging Market exporters are starting to struggle. But while exports from Emerging Asia have continued to grow (albeit at a slower rate), exports from both Emerging Europe and Latin America are now …
10th May 2013
Total debt in emerging markets (EMs) is relatively low by international standards. But the history of EMs suggests that crises often occur when credit grows rapidly for several years rather than crosses a specific threshold. On this basis, China, Korea …
9th May 2013
The April manufacturing PMIs add to evidence that the emerging market (EM) recovery has lost pace in recent months. The slowdown has affected most EM regions, but the BRIC economies seem to have been the major underperformers. … EM manufacturing …
3rd May 2013
Industrial output in the emerging world has increased by a remarkable 30% in the past five years. Yet impressive growth at an aggregate level masks a wide variation in the performance of individual regions. Almost all of the increase in output since 2008 …
1st May 2013
Recent evidence of weaker economic activity in China and falling global commodity prices supports our view that overall emerging market (EM) growth will disappoint in the years ahead. But while commodity producers in Latin America and Africa may …
24th April 2013
The recent weakness of the economic data across the emerging world has been exacerbated by calendar effects. Even so, our EM GDP Tracker reveals a broader trend of weakening activity, particularly in the BRIC economies. … BRICs continue to …
22nd April 2013
EM consumer spending has been one of the bright spots in the global economy in recent years, supported by healthy wage growth, low unemployment and loose monetary policy. But retail sales growth tailed off in early 2013. In aggregate, sales growth fell to …
18th April 2013
Although emerging markets (EMs) have experienced rapid growth over the past 30 years, this period has been punctuated by occasional economic and financial crises. These have typically been preceded by “excessive exuberance” and rapid capital inflows to …
16th April 2013
The recovery of Emerging Market exports has continued in recent months, but forward looking indicators suggest that they will soften over the course of Q2. What’s more, a big divergence remains in the fortunes of the regions. While Emerging Asia, Africa …
12th April 2013
The latest data suggest that the EM recovery may already be running into headwinds. With policy set to remain loose in most economies, EM growth is probably not about to slow again and will far outpace growth in the developed world. Nonetheless the …
10th April 2013
Hopes that the rebound in China’s economy will help other EMs look set to be disappointed. Chinese trade data for March will be released later this week (Wednesday). But so far at least, the recovery in Chinese imports has been modest and concentrated on …
9th April 2013
The latest PMIs suggest that manufacturing in the emerging world stuttered last month. Activity slowed further in emerging Europe and Latin America. The only region where activity accelerated was emerging Asia, but these figures may have been distorted by …
3rd April 2013
At their summit in South Africa today and tomorrow, leaders of the BRICS are expected to announce progress towards setting up a development bank and to outline a plan to pool some of their foreign reserves. But in reality the group is more of political …
26th March 2013
Sentiment toward EM assets has turned negative over the last month despite the relatively upbeat performance of many developed markets. Equities have come off recent highs, currencies have mostly depreciated against the US dollar and EM sovereign bonds, …
20th March 2013
Our EM GDP Tracker provides tentative evidence that the recent emerging market recovery is losing steam. Growth slowed slightly in Emerging Asia and Latin America in January, and continues to be very weak in Emerging Europe. … EM recovery …
18th March 2013
The recovery in Emerging Market exports continues to be concentrated in Asia. By contrast, exports from other EM regions, and commodity producers in particular, remain disappointing. … Divergence in export performance …
14th March 2013
As the BRICs enter a period of slower growth, new emerging market “growth stars” will come to the fore. We are particularly upbeat on the economies of sub-Saharan Africa and South East Asia. But Mexico, Poland and Turkey should also experience strong …
12th March 2013
Fears that politicians in the emerging world are trying to tighten their grip over monetary policy are generally wide of the mark. But Hungary is a notable exception. … Should we worry about EM central bank …
7th March 2013
The latest PMI surveys suggest that the recovery in emerging world manufacturing has lost a little steam recently. Part of the weakness can be explained by the effects of the Chinese New Year, which has dragged on Asian producers and should prove …
4th March 2013
The recent slowdowns in the BRIC economies are largely structural in nature and so are unlikely to be reversed without wide-ranging economic reform. Slower growth in the BRICs is likely to shave half a percentage point off global GDP growth over the next …
28th February 2013
The “Swan Diagram” – developed by the Australian academic Trevor Swan in the 1950s – offers a fresh perspective on global “currency wars”. It suggests that macro imbalances in those EMs that have been most vocal about currency strength (mainly in Latin …
25th February 2013
Talk of “currency wars” remains rife among EM policymakers but most EM currencies have actually weakened over the past month. This partly reflects growing investor fears of official intervention, but global risk appetite has also dipped – the rally in EM …
22nd February 2013
Capital flows to emerging economies are not yet running at a rate that should be a major cause for concern. But estimates of flows in aggregate miss some of the key risks facing individual economies. … Overall EM inflows not at danger levels but country …
21st February 2013
The continued weakness of exports from commodity producers in the emerging world will add further fuel to the debate over “currency wars”. By contrast, exports from manufacturing-focused economies in Emerging Asia and Emerging Europe have continued to …
15th February 2013
