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Disinflation process entering a slower phase The small fall in Polish inflation to 6.5% y/y in November is likely to mark the start of a slower phase for the disinflation process over the coming months. Against this backdrop, we think the central bank …
30th November 2023
GDP growth slowing, more to come The sharp slowdown in Turkish GDP growth to 0.3% q/q in Q3, together with more timely figures for Q4, suggest that the economy is rebalancing in response to the policy tightening this year. With the central bank set to …
This page was first published on Thursday 30 th November, covering the official PMIs. We added commentary on the Caixin manufacturing PMI on Friday 1 st December , and the Caixin services and composite PMI on Tuesday 5 th December. Reality may not be as …
Economy showing further signs of overheating Russia’s economy looks to have started Q4 on fairly solid footing and we think GDP growth of 3.0-3.3% this year is now highly likely. Support from loose fiscal policy and a strong labour market should keep GDP …
29th November 2023
The falls in the Egyptian pound over the past year have increased the size of commercial banks’ net FX assets, but what has flown under the radar is banks’ growing exposure to the government’s FX debt. So long as the authorities get the IMF deal back on …
In much of the world, interest rates are likely to settle at higher levels than was the case prior to the pandemic. But China is a key exception, with its shrinking population, slowing productivity gains, low inflation rate and increasingly-heavy debt …
After a sharp slowdown this year, GDP growth across the Middle East and North Africa will improve in 2024 as OPEC+ starts to reverse recent oil output cuts, while fiscal policy in the Gulf remains supportive. Outside of the Gulf, balance of payments …
28th November 2023
This page has been updated with additional analysis since first publication . Fall in headline inflation keeps another 50bp cut on the cards The decline in inflation in Brazil to 4.8% y/y in the middle of November means that – barring a major surprise in …
China’s economy is making headway again after stalling during the summer. A step up in policy support looks set to deliver a modest cyclical recovery but trend growth remains under pressure. … China Chart Pack (Nov. …
Central bank in “wait and see” mode Israel’s central bank left interest rates on hold at 4.75% again today and the communications continued to emphasise risks to the inflation outlook. But policymakers provided the first hint that an easing cycle could be …
27th November 2023
Following a temporary reversal in Q3, EM inflation has started to fall again in the last few months. While this is set to continue, we think it marks the start of a second phase in the EM disinflation process – one that will be characterised by a much …
Soft growth, falling inflation, lower interest rates, bond market rallies, and an election bonanza – here are the key themes that will shape 2024. Growth will undershoot the consensus. Economic growth is likely to be weaker than the consensus expects …
Markets welcome Milei’s win From a political angle, it’s hard to see Javier Milei’s victory in Argentina’s presidential election last Sunday as anything other than a rejection of the political establishment, in a similar vein to the surge in support seen …
24th November 2023
CBRT bringing tightening cycle to a close Turkey’s central bank (CBRT) delivered another chunky 500bp rate hike to 40% this week but it also signalled that its tightening cycle was very close to an end. The local elections in March may be playing a part …
Growth pick up is likely to be short-lived Nigeria’s economic growth was unchanged at 2.5% y/y in Q3 as a smaller drag from the oil sector offset a slowdown in the rest of the economy. Growth is likely to slow over the coming quarters, as the naira’s …
Revising up our GDP forecasts India’s economy recorded solid growth in the first half of this year and continues to do so in the second half. Household consumption appears to have been robust in recent months. The RBI’s latest consumer confidence survey …
More credit support for developers in the works Policymakers have been trying, and largely failing, to stabilise the property sector for some time. There was a major step-up in support in September, when downpayment requirements and purchase controls …
Tensions within OPEC+ rise as threat of cut looms OPEC+ was meant to be in the spotlight this weekend but, in a surprise move, the meeting has been delayed until Thursday. The slide in oil prices and the Israel-Hamas conflict suggest that output quotas …
23rd November 2023
India’s economy continues to show resilience this year and annual GDP growth is likely to come in stronger than the 6.3% we had been forecasting. While inflation is well within the RBI’s tolerance range, the renewed surge in food prices in November is a …
Our Emerging Europe Chart Pack has been updated with the latest data and our analysis of recent developments. Russia and Turkey had a strong first half to the year, but large policy tightening is likely to result in slower growth in 2024. Inflation will …
The South African Reserve Bank opted against responding to last month’s larger-than-expected rise in inflation with an interest rate hike, leaving the repo rate unchanged at 8.25% today. But officials continued to strike a hawkish tone and it looks like …
This page has been updated with additional analysis since first publication . High services inflation will stop Banxico from cutting for now Mexico’s mid-month inflation reading of 4.3% y/y in November provides signs that the disinflation process is …
CBRT delivers another large hike, end of tightening in sight Turkey’s central bank (CBRT) delivered another 500bp interest rate hike, to 40.0%, at today’s meeting and suggested that it is very close to the end of the tightening cycle. A final 250bp hike …
The Israeli government’s budget deficit is widening sharply and we think it will breach 5% of GDP next year. Provided the length of the war and the increase in the deficit are short-lived, we don’t think this will cause funding problems and the …
22nd November 2023
This page has been updated with additional analysis since first publication. Consumption bouncing back The batch of Polish activity data for October provide clearer signs that the economy has turned a corner and that a recovery is taking hold, driven by …
Inflation rises, but SARB will take comfort from weaker core pressures The larger-than-expected rise in South Africa’s headline inflation rate, to 5.9% y/y in October, is likely to reinforce central bank policymakers’ hawkish rhetoric when they meet …
Emerging Markets Chart Pack (November 2023) …
21st November 2023
Sticking to aggressive easing ... for now The Hungarian central bank (MNB) cut its base rate by another 75bp (to 11.50%) as expected today, and we think it will continue to lower rates in similar steps until the end of Q1. That said, with the disinflation …
In our flagship report on the neutral interest rate (r*), we argued that r* in developed markets will rise and be higher than is widely assumed. (The full report can be accessed here .) For most EMs, r* is also likely to be higher (with China being a …
20th November 2023
Does the surprise victory of Javier Milei in Argentina's presidential election mean the country is about to experience a raft of unorthodox economic policymaking to fix its ailing economy? How likely is Milei's dollarisation plan? What does this electoral …
The intensification of loadshedding has brought growth in South Africa’s economy to a halt this year, but there appears (finally) to be some light at the end of the tunnel. Repairs to existing power plants, independent power projects, and the …
This page has been updated with additional analysis since first publication . Economic recovery now underway The 0.3% q/q expansion in Chile’s GDP in Q3 suggests that the recovery is beginning to take hold. We continue to expect above-consensus GDP …
Javier Milei’s victory in the final round of Argentina’s presidential election yesterday will bring about a major shift in economic policymaking. We suspect that some of his more radical proposals – namely dollarisation – may not materialise given limited …
Our China Activity Proxy (CAP) shows that the economy was still making headway last month, though it appears to have lost some steam. Downside risks continue to linger, particularly in the property sector. But we think policy support will keep the …
Easing inflation and stronger shekel Data out of Israel for October this week suggest that the initial impact of the conflict with Hamas on the export sector was fairly limited, that inflation pressures continued to ease and that the chances of an …
17th November 2023
Developers retreating, LGFVs taking their place In remarks published by state media last weekend, China’s housing minister, Ni Hong, discussed plans to alter the country’s real estate development model, shifting the focus from quantity to quality. There …
Commodity imports boosting trade deficit The men’s cricket team are soaring on the pitch, while the monthly goods trade deficit is doing so off it. Data released this week showed that it hit an all-time high of $31.5bn in October. That surpassed the …
With a lot of pessimism seemingly already priced in to China’s “risky” assets, we suspect a thawing in US/China relations could give them a boost. But we think their longer-term outlook is less rosy. Meanwhile, we don’t think US/China tensions will have …
Sovereign debt risks across Frontier Markets have eased slightly since last quarter. But dollar-bond spreads in Ethiopia have jumped following its request for debt-service suspension earlier this week. And we think that the risk of default over the coming …
16th November 2023
Saudi’s new Civil Code another step to attract FDI In a month’s time, Saudi Arabia’s new Civil Code will come into force in a bid to further entice foreign investors to the Kingdom, but more is required to hit Vision 2030 targets. The Civil Code contains …
Israel holds up well in Q3, but sharp drop coming in Q4 The slight slowdown in Israeli GDP growth to 2.8% q/q annualised in Q3 was more or less in line with expectations but comes before a likely sharp drop in Q4 amid the impact of the war with Hamas. …
Economy overheating, central bank has more work to do The rise in Russian GDP growth to 5.5% y/y in Q3 was larger than expected and adds to evidence that the economy continued to overheat last quarter. With fiscal policy set to loosen further and …
15th November 2023
This page has been updated with additional analysis since first publication . Struggling for momentum The softer-than-expected 0.2% q/q rise in Colombian GDP in Q3, coming alongside signs that the economy was weakening towards the end of the quarter, …
The squeeze on Russia’s budget and current account positions has eased over the second half of this year, largely thanks to a rise in oil prices. Higher energy revenues next year should help to limit the impact of a surge in military spending on the …
The latest Saudi GDP data paint a downbeat picture in which the recession has deepened amid oil output cuts. But the good news is that the recession looks to be coming to an end. And we think the economy will begin to recover over the coming quarters as …
Inflation quickens again, putting more pressure on the CBN to act Nigeria’s headline inflation accelerated again to 27.3% y/y in September, as the removal of fuel subsidies and the naira’s struggles continued to feed through. The central bank will need to …
Retail recovery helping to offset industrial weakness September’s activity data for South Africa suggest that the economy probably stagnated over Q3 as a whole. Some of the recent drags on the economy, such as loadshedding, are likely to ease in 2024 but …
We think that bonds in Emerging Markets (EMs) will struggle in the next couple of months. Further ahead, though, we expect their yields to fall, as both “risk-free” rates and spreads drop. The yields of EM local-currency and dollar-denominated bonds have …
This webpage has been updated with additional analysis, as well as a Chart and Table of key data. Saudi Arabia’s headline inflation rate edged down from 1.7% y/y in September to 1.6% y/y in October, the weakest pace of inflation in nearly two years, and …
