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India’s economy has grown at a healthy clip over recent quarters and, with the help of government spending, we think it will continue to hold up well ahead of next year’s general election. Given also that food inflation has picked up again, the RBI will …
13th December 2023
Overview – Economic growth in the Middle East and North Africa will strengthen a little in 2024 but is likely to come in well below consensus expectations. OPEC+’s cautious approach to oil policy will keep a lid on economic growth in the Gulf over the …
The economic reform measures announced yesterday by Argentina’s Economy Minister Luis Caputo, including a large devaluation of the peso and fiscal tightening, mark a clear change in policymaking from the previous Peronist administration. But this wasn’t …
Broad based weakness signals a weak end to 2024 September’s activity data for South Africa suggest that economy continued to struggle at the start of Q4. But we think that a combination of easing electricity outages and less restrictive fiscal policy will …
This page has been updated with additional analysis since first publication . A smaller-than-expected acceleration Broad credit growth continued to rise in November thanks to a pick-up in government bond issuance, but it still came in below expectations. …
Inflation drops back, but SARB to remain hawkish as core rate rises South Africa’s headline inflation rate dropped back to a slightly lower-than-expected 5.5% y/y in November, but the fresh rise in core inflation reinforces our view that the Reserve Bank …
Economy slowing at the start of Q4 The further softening in Turkish retail sales and industrial production growth in October suggests that the slowdown in the economy continued at the start of Q4. We think it’s possible that GDP contracts outright this …
Table of Key Forecasts Overview – Aggregate EM GDP growth will enter a slower phase over the coming quarters. But the headline figure masks an unusually large variation in prospects at a country level. Many of the EMs that fared surprisingly well in 2023, …
12th December 2023
This page has been updated with additional analysis since first publication. Elevated food inflation suggests no chance of imminent loosening Headline consumer price inflation rose to a three-month high of 5.6% y/y in November amid a renewed rise in food …
This page has been updated with additional analysis since first publication . Another 50bp rate cut on the cards tomorrow The small fall in Brazil’s headline inflation rate in November, to 4.7% y/y, makes another 50bp interest rate cut (to 11.75%) at …
We think the rally in developed market (DM) government bonds will continue for a while yet, as some major central banks, including the Fed, ultimately cut by more than investors seem to expect. But we anticipate that yields will generally settle at much …
11th December 2023
Sharp fall in inflation, but rates likely to be left on hold next week The fall in Czech inflation to 7.3% y/y in November means that the start of a monetary easing cycle at next week’s policy meeting is still very much a close call. But at this stage we …
This page has been updated with additional analysis since first publication . Decline in services inflation a concern CPI fell deeper into deflationary territory last month. The main culprit continues to be food and energy prices – the rate of core …
Price pressures continue to mount The rise in Russian inflation to 7.5% y/y in November is likely to be followed by further increases in the coming months as the economy continues to overheat. We think this CPI release supports the case for a 100bp …
8th December 2023
What we’ve learned from the State Tribunal drama The debate around whether Polish central bank governor Glapinski could be brought before the State Tribunal and be removed from his post took more twists and turns this week. But at this stage the events …
Faith in the state backstop as strong as ever Earlier this week, Moody’s downgraded the outlook on China’s sovereign credit rating from “stable” to “negative” and made similar changes to its ratings outlook for Chinese banks, local governments and …
Sensex surges as BJP wins big in state elections The financial market reaction to the announcement of the BJP’s victory in three state elections is perhaps an indication that investors are confident that next year’s general election will deliver another …
The RBI kept the repo rate on hold at 6.50% today as expected and continued to strike a hawkish tone. Against a backdrop of robust economic growth and a renewed rise in food inflation, we doubt the central bank will loosen policy until the second half of …
RBI in no rush to loosen policy The RBI kept the repo rate on hold at 6.50% today as expected and continued to strike a hawkish tone. Against a backdrop of robust economic growth and a renewed rise in food inflation, we doubt the central bank will loosen …
Overview – Inflation and interest rates will fall across Central and Eastern Europe (CEE) in 2024 and an economic recovery is likely to take hold across the region. But the task of bringing inflation back to central banks’ targets will take time and we …
7th December 2023
Stubborn services inflation means Banxico to tread slowly with cuts Although Mexico’s headline inflation rate was weaker than expected last month (at 4.3% y/y), uncomfortably strong services inflation supports our view that Banxico’s easing cycle (likely …
The economic influence of elections is often overstated. They have only tended to have significant effects if governments have embarked on big structural reforms, interfered with monetary policy or changed their geopolitical stance. Even then, the …
Egypt: aftermath of election to prove pivotal Next week Egyptians will head to the polls to vote in the presidential election and, while it is widely expected President al-Sisi will be re-elected, the vote could act as a trigger for policy moves that are …
A stand-out feature of the emerging world in 2023 has been the extent to which economic cycles have diverged. Divergence is likely to be the name of the game in 2024 too. We think some countries which have performed surprisingly well this year (e.g. …
This page has been updated with additional analysis since first publication . Export volumes reach new high China’s export values rose year-on-year for the first time since May while the level of export volumes hit a fresh high, supported by exporters …
Easing cycle paused The National Bank of Poland (NBP) left interest rates on hold as expected today, and we think the easing cycle will remain on pause until the end of Q1. With the economy recovering and the disinflation process likely to stall over the …
6th December 2023
Overview – China’s economy has regained some strength recently. We expect this to continue into 2024, on the back of support from fiscal policy and a further pick-up in household spending. But with property construction likely to continue to decline and …
Inflows into EM bond and equity markets have picked up over the past month, particularly in Turkey where optimism around the policy U-turn seems to be building. Capital flows into EMs may be bumpy in the very near term as global growth disappoints, but …
5th December 2023
Overview – India’s economy has grown at a healthy clip over recent quarters and, with the help of government spending, we think it will continue to hold up well ahead of next year’s general election. Given also that food inflation has picked up again, the …
This page has been updated with additional analysis since first publication . Entering a period of softer growth Brazil’s economy fared better than expected in Q3, expanding by 0.1% q/q, but the bigger picture is that the strong growth seen in the first …
This report has been updated with additional analysis, including the release of the UAE's PMI on 6th December. Gulf non-oil sectors cushioning slowdown; Egypt’s economy sputtering along The batch of PMIs for November from the Middle East and North Africa …
Economy contracts, but modest recovery likely in 2024 South Africa’s economy contracted by 0.2% q/q in Q3 and more timely indicators point to a weak end to 2023, not helped by recent disruptions to the port and freight network. But there are reasons to …
The latest batch of state election results suggests that support for Prime Minister Modi’s BJP remains firmly intact and that it is clearly in the driving seat to secure another victory in next year’s general election. That reduces the risk of big fiscal …
4th December 2023
The COP28 jamboree in Dubai will produce a long list of climate promises from governments and corporate leaders, but these will be of little practical help to market participants attempting to track progress on the green transition in a systematic way. …
This publication has been updated due to an error in the previous version. Further evidence of easing price pressures The small rise in Turkish inflation to 62.0% y/y in November adds to evidence that inflation pressures in the economy continue to cool. …
The emerging market manufacturing PMIs for November were a mixed bag – although most headline indices edged up, they remained below 50 in over half the countries that we track, largely due to weak external demand. But price pressures did ease across the …
1st December 2023
Investors increased their expectations for interest rate cuts by the ECB after November’s soft euro-zone inflation print this week, but in parts of Central and Eastern Europe (CEE) the latest developments suggest inflation will take a lot longer to fall …
This page has been updated with additional analysis since first publication . Further signs that Brazil’s recent outperformance has ended The meagre 0.1% m/m expansion in Brazil’s industrial production in October adds to the signs that, after a very …
SA's public debt risks a problem for banks? The key takeaway from the South African Reserve Bank’s latest Financial Stability Review released this week is growing concern about local financial institutions’ holdings of government bonds – what the report …
Ramp up in fiscal support yet to be fully felt Government borrowing has been strong ever since the Politburo called for an acceleration in bond issuance at its July meeting. Momentum has been sustained by a rare mid-year increase in the deficit target …
Revising up our GDP forecasts The activity data this week confirm that India’s economy is rude health. The GDP data for Q3 (Q2 of FY23/24) showed a slowdown in both y/y and q/q, but this was very mild and the bigger picture is that the pace of growth …
This page has been updated with additional analysis since first publication. Manufacturing activity likely to end the year on a high note The manufacturing PMI survey for November suggests that activity continues to remain strong in Q4. The economy is on …
Economic strength and latest jump in food prices suggest no change in policy next week RBI will be reluctant to loosen too quickly given persistent food inflation threat We now think that rate cuts won’t materialise until second half of next year We …
30th November 2023
This page has been updated with additional analysis since first publication. India to remain an EM outperformer The RBI had stated that the GDP data for Q3 (Q2 of FY23/24) would “surprise everyone on the upside” and, even despite that spoiler, the data …
All eyes on Vienna and Dubai The UN’s annual climate conference, COP28, gets underway in Dubai today with thousands of delegates set to attend. But events in Vienna could take the spotlight. OPEC+’s delayed meeting is taking place as we speak and could …
