Filtered by Region: Emerging Markets Use setting Emerging Markets
This publication has been updated with additional analysis from the post-meeting press statement and press conference. CNB’s easing cycle has a lot further to run The Czech National Bank (CNB) cut its policy rate by 50bp again today, to 5.75%, and we …
20th March 2024
South Africa’s latest hard activity data show that the economy continued to struggle at the start of 2024, which will hardly help the ANC’s hopes of keeping its majority in parliament after May’s election. That said, we still think that easing electricity …
Our markets team recently held an online briefing all about how we expect global equities, bonds, and currencies to perform through the end of this year and into 2025. During this session, the economists answered questions from the audience following …
Jump in inflation to delay start of interest rate cuts The larger-than-expected rise in South Africa’s headline inflation rate, to 5.6% y/y, in February means that the SARB is likely to delay the start of its easing cycle until after May’s election. …
Prime Minister Modi’s BJP appears on course to remain in power after India’s upcoming general election. But which party wins probably matters less for the economy and financial markets than whether the election delivers a stable government with a working …
19th March 2024
The global economic outlook is subject to various uncertainties which have left forecasters split over the possibilities of a hard landing, soft landing or even renewed recovery. Are the worst effects of previous interest rate hikes yet to be felt? Or …
In a big year for elections, this is the biggest. India’s general election begins on 19 th April, with nearly a billion Indians registered to vote and Narendra Modi on course to win a third term as prime minister. But even if the conclusion seems …
18th March 2024
Capital inflows into EMs have picked up in recent weeks on the back of an improvement in risk appetite. This may set the tone for the rest of the year, particularly once the Fed begins to cut interest rates. Since the publication of our previous Capital …
Weak end to 2023, but better start to 2024 The 0.1% q/q rise in Chilean GDP confirms that the economy had a stop-start recovery over the course of last year, but we think that it will make more solid gains over the course of 2024. Our growth forecast for …
Vladimir Putin secured a record victory in Russia’s presidential election over the weekend. The focus now will be on whether this emboldens Putin to devote more resources to the war effort, whether policymakers push through unpopular non-war fiscal …
Donald Trump’s threat to impose a blanket 10% tariff on all US imports would hit Vietnam hard. But provided they were accompanied by a 60% tariff on all imports from China (as Trump has also threated), then Vietnam should benefit from a new round of Trump …
This page has been updated with additional analysis since first publication . A decent start to 2024 despite a still fragile consumer China’s economy continued to show some improvement at the start of the year thanks to strength in exports and fiscal …
Pressure building in Turkey ahead of the election Pressures on Turkish policymakers are building ahead of the local elections on 31 st March as capital inflows have slowed and FX reserves are falling again. We doubt the central bank will hike interest …
15th March 2024
Nigeria eyes up return to Eurobond market The Nigerian naira’s latest devaluation has taken it closer to fair value and, with investor sentiment towards Nigeria improving, the government is lining up a fresh Eurobond sale. That may help to plug the budget …
Campaign will boost demand but also supply On Wednesday, the State Council published an action plan to promote the large-scale upgrading of equipment and trading-in of consumer goods. We already discussed the implications of the latter in our previous …
Inflation hits 31%, but CBN likely to hold fire on further rate hikes Nigeria’s headline inflation accelerated to a higher-than-expected 31.7% y/y in February and the naira’s latest sharp falls mean it will continue to march towards 35% y/y over the …
This page has been updated with additional analysis since first publication . Rebound in credit growth blown off course Bank loan growth in China decelerated to its slowest pace on record in February, while broad credit growth reversed most of its recent …
Global outperformance set to continue This week we published our Q2 India Economic Outlook . The key point is that while growth is likely to moderate over the coming quarters, India will remain a global outperformer. We are forecasting GDP growth of 7% in …
Higher inflation a cost to Egypt’s policy shift The fall in the Egyptian pound last week has raised concerns of a fresh surge in inflation, which wasn’t helped by February’s strong reading. However, while we may see another acceleration in March, we think …
14th March 2024
Recent years have sharpened investor focus on identifying risks and vulnerabilities across the EM world as the pandemic, the Ukraine war and the surge in US rates have exposed vulnerabilities, hammered EM currencies and triggered several defaults. But how …
We expect the divergence in growth prospects observed in EM Q4 GDP data to be a running theme over the next couple of quarters too. Specifically, we think that some of last year’s outperformers, including Brazil and Mexico, will struggle as one-off tail …
Inflation nudges up as rents continue to rise The increase in Saudi Arabia’s headline inflation rate to 1.8% y/y in February is the highest reading since August and it could creep to above 2.0% y/y in the coming quarters. The bigger picture, however, is …
Our latest Latin America Chart Pack is embedded below. Activity in the region slowed to a crawl at the end of last year and, while a recovery will take hold in the coming quarters, growth will disappoint consensus expectations. The disinflation process …
13th March 2024
This page has been updated with additional analysis since first publication. Inflation picks further, rates to stay high for some time The rise in Russian inflation to 7.7% y/y in February highlights that price pressures in the economy remain strong and …
The devaluation of the Nigerian naira earlier this year appears to have brought it much closer to fair value, which will help to put the balance of payments on a more stable footing. The key now is for the CBN to allow the naira to move in line with …
Overview – India retained its title as the world’s fastest-growing major economy last year and we expect further strong growth over the coming years. That would put India on course to become the world’s third largest economy within the next couple of …
The impact of a second Trump presidency on Mexico’s economy would depend to a large extent on whether the USMCA deal remains intact or Mexico finds itself subject to US import tariffs. If the latter, Mexico would be one of the most affected EMs. And even …
12th March 2024
Core inflation strength will worry Copom The Brazilian inflation data for February, which showed that the headline rate held steady at 4.5%, provided further evidence that underlying inflation pressures remain strong. This supports our view that interest …
This page has been updated with additional analysis since first publication. Slow grind back to 4% Headline consumer price inflation held steady at 5.1% y/y in February and looking ahead, we think it will take a few more months before it reaches the RBI’s …
Turkey’s balance of payments figures for January showed that the current account deficit continued to narrow, but the drop in capital inflows in recent months is a concern and it appears that this forced the central bank to sell FX reserves. This adds to …
EMs will account for over half of global GDP within the next decade and almost 60% by 2050. Headlining this, India will become the world’s third-largest economy as soon as 2026. More generally, EMs with rapid population growth, the potential to develop …
11th March 2024
Out of negative territory but set to remain low CPI inflation turned positive last month for the first time since September, thanks to temporary factors such as the volatility in food and tourism prices around Lunar New Year. But persistent overcapacity …
South Africa’s struggling PGM producers Lower global metal prices are pushing South Africa’s major producers to contemplate cost-cutting which could lead to lower output and fewer jobs, adding yet another constraint to the modest pick-up in growth that we …
8th March 2024
Sheinbaum’s policy platform to hit fiscal realities Claudia Sheinbaum, the frontrunner to become Mexico’s next president, revealed her policy plans over the past week which, as expected, are aimed at building on President López Obrador’s legacy. But her …
Setting the record straight on recent HUF weakness The dispute between the Hungarian central bank (MNB) and the government heated up further this week, which has fuelled a narrative that threats to central bank independence are responsible for the recent …
Activity holding up The second estimate of Korea’s GDP figures published this week confirmed that the economy grew by 0.6% q/q in the final quarter of last year. Encouragingly, the more recent monthly activity data suggest the economy made a decent start …
RBI is stepping in to prevent currency appreciation The Indian rupee has stood out so far this year as being one of only a small handful of EM currencies to have strengthened against the US dollar. (See Chart 1.) Chart 1: Currencies vs. US$ (% change, …
This year is a particularly busy one for elections in the emerging world, and these votes raise the risk of fiscal giveaways that worsen public debt dynamics. We think the risks are greatest in Tunisia, followed by South Africa and Romania. Elsewhere, …
7th March 2024
The raft of policy reforms announced by the Egyptian authorities yesterday, including a devaluation of the pound and new IMF deal, has put the economy on a path out of its current crisis. There have been false dawns before, but we think that momentum is …
We discussed the implications of Russia’s election in a Drop-In on Tuesday, 12 th March. Click here to watch the 20-minute online briefing. The outcome of Russia’s presidential election taking place over 15-17 th March is not in doubt: Putin is all but …
Inflation drops, Banxico on course for rate cut this month The drop back in Mexico’s headline inflation rate to 4.4% y/y in February, alongside the weakness of the latest activity data, leaves Banxico on course to cut interest rates at its next Board …
Rates on hold throughout 2024 Bank Negara Malaysia (BNM) left its overnight policy rate on hold (at 3.0%) today, and hinted in its statement that it was in little rush to change interest rates any time soon. This supports our view that the policy rate …
Export volumes hit record high China’s export values rose y/y at the fastest rate since May, with export volumes reaching a record high. We doubt the sustainability of this strength, however, since exporters now have more limited scope to reduce prices to …
The announcement of an agreement over a new IMF package for Egypt, coming on the back of the rate hike and devaluation earlier today, represents a shift towards more orthodox policymaking. While it is still early, Egypt now appears to be on the path out …
6th March 2024
The Egyptian central bank has announced steps to tackle its economic crisis, including a large devaluation and a bumper interest rate hike. But will it be enough? Economists from our Emerging Markets team held this special 20-minute briefing on whether …
The drag from the unavoidable structural decline in China’s property sector has only just begun. Property sales and project starts have collapsed. But property construction activity has retreated only a little. It is likely to halve in the next few years, …
We hosted a Drop-in following the announcement that can be viewed on demand here . Central Bank of Egypt shifts back towards orthodoxy The announcement minutes ago from the Central Bank of Egypt that it has devalued the pound and hiked interest rates by a …
The policy agenda laid out at the National People’s Congress today is a reasonably pro-growth one. The new fiscal plans are supportive, monetary policy continues to have an easing bias, and the Premier reiterated recent welcome messages about …
5th March 2024
Very modest growth in Q4, but 2024 should be better South Africa’s economy posted a measly 0.1% q/q increase in GDP in the final quarter of last year and the latest evidence points to a soft start to 2024 too. But we still think that, with the drags from …
Gulf non-oil sectors strengthen in Q1; Egypt’s economy knocked by Israel-Hamas spillovers February’s batch of PMIs from the Middle East and North Africa continued to show that the Gulf’s private non-oil sectors have started 2024 on a strong footing. But …
