Filtered by Region: Emerging Markets Use setting Emerging Markets
BoI strikes a slightly more dovish tone as rates stay on hold The Bank of Israel (BoI) left its policy rate on hold again today, at 4.50%, but the accompanying communications struck a slightly more dovish tone and we think that it will be in a position to …
6th January 2025
Fall in inflation points to 250bp rate cut this month The larger-than-expected fall in inflation in Turkey last month, to 44.4%, points towards another 250bp interest rate cut, to 45.0%, at the next central bank meeting on 23rd January. The outturn was …
3rd January 2025
The small fall in the aggregate EM manufacturing PMI in December and the declines in headline PMIs for most countries suggests that EM industry lost some pace at the end of the year. We think manufacturing activity will remain fairly subdued over the …
2nd January 2025
Our China Activity Proxy suggests that activity growth slowed in November. That was partly driven by a slowdown in fiscal support, reflected in weaker services activity in particular. But industrial activity also slowed on the back of weakening exports. …
31st December 2024
Non-manufacturing sector recovers strongly This report was first published on the 31 st December covering the official PMIs. We added commentary on the Caixin manufacturing PMI on 2 nd January and the Caixin services and composite PMIs on 6 th January. …
Data releases and a slew of central bank meetings have made for a busy end to the year. Our latest monetary policy analysis is listed here , and you can explore and download our interest rate forecasts here and listen to our Drop-In (our short-form online …
23rd December 2024
Is Putin moving closer to a compromise? A lot of headlines from President Putin’s annual year-end press conference have focused on suggestions that he’s willing to make compromises to end the war in Ukraine. But it also remains clear that the two sides …
20th December 2024
Economies in Eastern Europe are struggling heading into 2025, and policymakers have limited scope to provide support. We think that stubborn inflation pressures and currency weakness will mean that interest rates are cut by less than other analysts …
Anatomy of a (self-inflicted) crisis Brazil this week was on the precipice of a crisis – if not in one already. The real continued to tumble, hitting a record low of 6.3/$ on Wednesday – down around 10% against the dollar since late October. 10-year local …
Nigeria: more rate hikes not a done deal Nigeria’s headline inflation rate crept up further in November, but we’re not convinced that this will prompt the central bank to deliver more rate hikes. Figures released on Monday showed that Nigeria’s headline …
A rare dovish surprise from the CBR The unexpected decision by Russia’s central bank to leave interest rates on hold at 21.00% today, rather than hike further, sparks a lot of questions about the central bank’s reaction function – and whether it may be …
Tab le of Key Forecasts Overview – Headwinds to growth will remain strong in 2025 and our forecasts lie below the consensus. While more protectionist US trade policy will hit China and Mexico, the impact for most is likely to be limited. Currencies will …
19th December 2024
Easing on pause as the neutral level approaches The Czech central bank (CNB) left its policy rate on hold at 4.00% today, but we think that the easing cycle will resume before long. We still expect rates to fall towards 3.00% by the end of next year. …
The economy should post decent growth in Q4 off the back of more forceful fiscal support. The leadership signalled following the recent Central Economic Work Conference that policy will be loosened next year which should continue to prop up activity. But …
Saudi Arabia’s constrained approach to oil policy is here to stay until April and, coupled with the turn to fiscal consolidation, means growth will pick up by less than others expect in 2025. The final estimate of Saudi GDP showed that the pace of …
Africa Chart Pack (Dec. 2024) …
18th December 2024
A collapsing currency. A gaping budget deficit. And a president adding fuel to the fire. As a sense of crisis envelopes Brazil, economists from our EM and Markets teams held this special briefing on the market, policy, and the implications for Latin …
Rates on hold, new MNB Governor will have little scope to cut in 2025 The Hungarian central bank (MNB) left its base rate on hold again today, at 6.50%, and we think that a rise in inflation in early 2025 will keep rates on hold until at least the new …
17th December 2024
Overview – China’s leadership has signalled that policy will be loosened further, which will provide a near-term prop to activity. But we still expect China’s growth to slow next year, because of the more challenging external environment and a further …
EM GDP growth picked up in the second half of the year but faces headwinds in 2025 from tight policy at home and challenges abroad. Our growth forecasts generally sit below the consensus. Monetary easing will continue but, outside Asia, high inflation …
16th December 2024
An unexpected loss of momentum China’s economy appears to have slowed last month, despite tailwinds from recent policy easing. Growth still looks on course to pick up this quarter, but the disappointing November data underscores the challenge policymakers …
Winner and losers from Assad’s downfall The fall of Syria’s President Bashar al-Assad last weekend is a monumental development after a period of 54 years in which his family had ruled the country. While there is still a high level of uncertainty over the …
13th December 2024
South Africa October activity data point to recovery While data out this week showed renewed struggles in South Africa’s mining sector, other figures suggest that a recovery has taken hold in Q4. The retail sector recorded a 1.6% m/m gain in October, more …
B ut a dramatic shift in policy approach still unlikely The Central Economic Work Conference (CEWC), an annual gathering at which China’s leadership discusses targets and priorities for the following year, concluded yesterday. We discussed the key …
Inflation in South Africa is now running at extremely low rates by historic standards. While we think it will edge up from here, the extent of spare capacity in the economy and tight fiscal stance mean inflation will remain lower than consensus …
Risks to Russia’s macroeconomic stability are mounting on the back of the recent credit boom and sharp rise in interest rates. Our EM financial risk indicators show that Russia is now at high risk of a banking crisis. We don’t expect these risks to …
12th December 2024
Capital inflows into EMs have been resurgent over the past few weeks amid a broader improvement in global risk appetite. Looking ahead, however, likely policies from President-elect Trump point to a renewed strengthening in the US dollar – an environment …
The Brazilian central bank’s aggressive interest rate hike yesterday may help ease concerns that fiscal dominance will take hold. But we think that measures to keep government debt servicing costs artificially low will ultimately form part of the solution …
Fiscal fears and overheating economy trigger a bumper hike Brazil’s central bank stepped up the pace of tightening with a larger-than-expected 100bp hike, to 12.25%, to the Selic rate and made clear that there will be at least two more 100bp increases, to …
11th December 2024
Surging inflation will force another large rate hike The renewed acceleration in Russian inflation to 8.9% y/y in November, and likelihood of further increases in the coming months, argue strongly in favour of another large interest rate hike from the …
Softer-than-expected inflation points to further SARB cuts in 2025 The smaller-than-expected rise in South Africa’s headline inflation rate, to 2.9% y/y, in November, coupled with the surprise contraction in GDP in Q3, means that the monetary policy …
While emerging market (EM) dollar bonds have gained some ground lately, they have underperformed US high-yield corporate bonds in total return terms, and we suspect they will continue to lag next year. The stripped spread of the JP Morgan Global EMBI …
10th December 2024
2025 will be a far quieter year in terms of elections than this year was. But there are some key votes that will, among other things, determine whether Argentina’s President Milei builds support for his radical stabilisation plan and whether the Czech …
Rising inflation points to Copom stepping up tightening tomorrow The further rise in Brazil’s inflation rate, to 4.9% y/y, in November alongside the weakness in the real and strong economic growth mean that Copom is nailed on to step up the pace of …
New governor may set a new direction for RBI India’s government has just appointed Revenue Secretary Sanjay Malhotra as the new governor of the Reserve Bank of India (RBI). He will replace the Shaktikanta Das following six years at the helm. The …
9th December 2024
This page has been updated with additional analysis since first publication. Stimulus is propping up inflation Headline CPI inflation fell but this was mainly driven by easing upward pressure on food prices. Core inflation edged up and PPI deflation …
Another twist in Romania’s election rollercoaster Romania’s constitutional court unexpectedly announced today that it will annul the first round of the presidential election , which took place on 24 th November and saw independent far-right candidate, C …
6th December 2024
South Africa GDP miss to be followed by rebound The 0.3% q/q fall in South Africa’s GDP in Q3 was disappointing, but it was largely driven by a slump in agriculture that should unwind. Along with low inflation and continued monetary easing, we expect the …
NBP leaves rates on hold, little scope for easing in 2025 The National Bank of Poland (NBP) left its policy rate on hold again today, at 5.75%, and a rise in inflation over the coming months means that the monetary easing cycle won’t resume until the …
4th December 2024
The main presidential candidates and their parties in Ghana’s upcoming election appear to be committed to restoring fiscal discipline and getting inflation under control. That said, the opposition NDC, which currently appears on course to take power, is …
3rd December 2024
Another strong quarter points to larger Selic hike The strong 0.9% q/q expansion in Brazil’s GDP in Q3 will add to the central bank’s concerns that the economy is running too hot. Alongside rising inflation and the sell-off in local financial markets in …
Surprise contraction, but things not so bad under the hood South Africa’s economy recorded a surprise contraction of 0.3% q/q in Q3, but that was largely due to a steep decline in agricultural output. The rest of the economy held up much better and we …
Rate cut in December may be jumping the gun The smaller-than-expected decline in Turkish inflation in November, to 47.1% y/y, suggests to us that a monetary easing cycle probably won’t start later this month as many analysts seem to be expecting. We …
The pick up in the aggregate EM manufacturing PMI in November was largely driven by China. Elsewhere, manufacturing activity looks as though it will remain relatively soft into next year. The surveys suggest that goods price pressures picked up last …
2nd December 2024
Central Europe continues to struggle The PMIs fell deeper into contractionary territory in Poland and Czechia last month, adding to the disappointing run of activity data out of Central Europe. In contrast, the PMIs rose in Turkey and Russia. And an …
Centre-left comes out on top, but fragmented coalition likely The centre-left Social Democrats (PSD) – the largest party in Romania’s current coalition – look set to win the most votes in the parliamentary election which took place on Sunday, but strong …
This report was first published on the 2 nd December covering the official PMIs and the Caixin manufacturing PMI. We added commentary on the Caixin services and composite PMIs on the 4 th December. Growth continues to pick up, led by manufacturing The …
CBN makes case inflation close to peaking Central Bank of Nigeria Governor Yemi Cardoso set out the case at this week’s MPC meeting for inflation to slow down, suggesting that officials are eyeing the end of the tightening cycle. The CBN’s …
29th November 2024
Mexico in Trump’s crosshairs President-elect Donald Trump fired the opening salvo in the next round of the trade war this week, threatening to impose a 25% tariff on all imports from Mexico (as well as from Canada, plus a separate tariff on China) on day …
