Filtered by Subscriptions: Emerging Markets Economics Use setting Emerging Markets Economics
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
Table of Key Forecasts Overview – The surge in virus cases across large parts of the emerging world and the slow pace of vaccine rollout mean that the headwinds facing the EM recovery are building. EM currencies are likely to see further falls against the …
28th April 2021
The broad-based improvement in EM goods trade balances over the past year is likely to unwind over the coming quarters as consumption patterns gradually normalise and oil prices recover further. But at the same time, a big build-up of external imbalances …
22nd April 2021
New COVID-19 cases have surged in the emerging world, with India, Emerging Europe and Latin America particularly hard hit. Social distancing measures have been tightened in many countries, which will weigh on activity. The early evidence suggests that the …
21st April 2021
With the notable exception of Turkey, the net capital outflows from emerging markets seen in February and March appear to have eased in recent weeks. Outflows may yet intensify over the coming quarters amid the backdrop of rising US Treasury yields, but …
15th April 2021
Virus outbreaks have taken a sharp turn for the worse across several large EMs – including India and much of Latin America – and look likely to hold back economic recoveries in Q2. The recent experience of Chile suggests that it will be a long slog for …
14th April 2021
A rise in US Treasury yields and tightening of external financial conditions could cause vulnerabilities in Turkey and a handful of smaller frontier markets to crystallise. However, most major EMs’ dependence on capital inflows looks limited. Instead, in …
12th April 2021
The mooted $650bn allocation of IMF Special Drawing Rights (SDRs) that looks close to being signed off would provide welcome relief to some smaller frontier markets such as Ghana and Kenya that still face very high foreign borrowing costs. But it won’t …
7th April 2021
Markit’s EM manufacturing PMI dipped last month, but the survey still paints a pretty positive picture of the sector’s recovery across the emerging world – with Brazil a notable outlier. In the meantime, supply chain disruptions are causing price …
1st April 2021
We have become more pessimistic about the outlook for emerging market (EM) assets and currencies as we now expect the 10-year US Treasury yield to rise further over the next two years . EM assets and currencies have come under pressure recently. (See …
The rapid re-opening of Israel’s economy since February has triggered a rebound in activity that looks stronger than had been widely anticipated. In particular, the recovery in hospitality and leisure spending has been faster than that which followed …
31st March 2021
The economic data out of the emerging world for Q1 look reasonably strong, but worsening COVID-19 outbreaks and a shift towards policy tightening are creating headwinds for some EMs. Activity in Central Europe, Brazil and the Philippines is already …
Particularly weak recoveries lie in store for tourism-dependent emerging markets, including much of Africa, parts of the Middle East (e.g. Jordan), and South East Asia (e.g. Cambodia). A lacklustre rebound in tourism could add to balance of payments …
29th March 2021
The raft of EM central bank decisions over the last couple of weeks suggests that the door has largely closed on further rate cuts and that the balance will shift (slightly) towards hikes over the coming months. But this has more to do with domestic …
26th March 2021
EM exports have continued to rise sharply in recent months and this strength may persist for a little while yet. But the big tailwind to some of the Asian economies from strong demand for electronics will turn into a headwind in the coming quarters, which …
24th March 2021
