Filtered by Region: Emerging Markets Use setting Emerging Markets
CBRT still waiting for further disinflation The communications accompanying the decision by the Turkish central bank (CBRT) to leave its policy rate on hold today, at 50.00%, were slightly more dovish than last month, but there are no clear signs to us …
19th September 2024
An acceleration in fiscal spending during the final months of the year should mean the 2024 growth target of “around 5.0%” is met, but only just – we now expect growth of 4.8% this year. China’s slowdown is likely to continue over the coming years as …
Copom hikes, leaves door open to more Just four months after last lowering interest rates and hours after the US Federal Reserve started its easing cycle with a bang, Brazil’s central bank delivered a 25bp hike to the Selic rate, to 10.75%, as officials …
18th September 2024
South Africa’s mixed recovery South Africa’s economy is enduring a clear divergence in its economic recovery. Consumer-facing sectors appear to be performing better but industry, particularly mining, continues to struggle. We think interest rate cuts will …
Drop in inflation sets the stage for rate cut tomorrow The dip in South Africa’s headline inflation rate, to 4.4% y/y, in August and the further decline in core inflation all but seals the deal on the SARB start an easing cycle tomorrow. We have pencilled …
The US Federal Reserve looks certain to start its loosening cycle this evening and, by virtue of their dollar pegs and open capital accounts, central banks across the Gulf will follow suit. Lower interest rates may provide relief to firms and households …
EM recoveries are beginning to slow and will continue to do so over the coming quarters. Within this there will be regional variation, with Asia the outperformer and Latin America the laggard. Headline inflation rates will end the year above target in …
17th September 2024
We recently held a series of EM-focused client meetings in Switzerland and Germany which covered a wide range of topics, including the impact of global fracturing , AI and the green transition on emerging markets. This Update answers several of the …
16th September 2024
Disinflation continues, CBN in place to cut rates yet Nigeria’s headline inflation rate dipped to 32.2% y/y in August, confirming the disinflation trend is firmly on course as the pass through from previous sharp falls in the naira continues to fade. This …
A temporary boost to employment growth After years of delay, China’s legislature today passed a bill that raises the statutory retirement age for the first time since 1978. In January, it will increase from 60 to 63 for men, 55 to 58 for white-collar …
13th September 2024
Renewed slowdown in credit Both broad credit and bank loan growth slowed in August, coming in below expectations. (See Chart 1.) While stronger government spending should give the economy a boost over the coming months, that doesn’t seem likely to be …
The ECB’s easing cycle continued this week and the first Fed rate cut is just around the corner, but we still think that central banks in Central and Eastern Europe (CEE) are now at the beginning of a slower phase of their easing cycles and will loosen …
CBR delivers surprise hike The decision by the Russian central bank (CBR) to hike its policy rate today by 100bp, to 19.00%, suggests that policymakers are even more concerned about the inflation outlook than we’d previously thought. While our forecast is …
What will the US election mean for the Asia growth outlook? Will China’s economy overtake the US? Will India fulfil its growth potential? We’re tackling these issues and more in our Asia roundtable in London on Tuesday, 24th September. If you’d like to …
The Fed’s upcoming monetary easing cycle will probably provide less of a tailwind to EMs than is widely thought. While it’s likely to give some central banks (such as in the Gulf, Mexico and Indonesia) a green light to lower interest rates, EM rate …
12th September 2024
Inflation stabilises, rates to be left on hold Russia’s headline inflation rate held steady at 9.1% y/y in August which, while slightly stronger than expected, won’t tip the balance towards another interest rate hike at the central bank’s meeting on …
11th September 2024
Saudi Arabia has cut oil output aggressively in the past two years but this has failed to prevent a slide in the Kingdom’s oil revenues. Officials are facing a tough choice over what to do next and, for now, we think that they will follow through with …
The swearing in of a new congress next month gives Mexico’s outgoing president, Amlo, a one month window to re-start plans to pass controversial planned constitutional amendments. At the very least, some form of judicial reform seems quite likely which …
Inflation picks up, CBE will wait until 2025 before cutting rates Egypt’s headline inflation strengthened from 25.7% y/y in July to 26.2% y/y in August, breaking a five month streak of decelerating inflation, after electricity and fuel price hikes. We …
10th September 2024
The new US controls on exports of semiconductor manufacturing equipment will slow China’s ability to expand its advanced chip-making capacity. While the immediate economic impact will be small, it will leave China’s hi-tech industry reliant on foreign …
9th September 2024
This page has been updated with additional analysis since first publication. Overcapacity continues to weigh on prices Despite a weather-related surge in vegetable prices, a fall in energy prices and core inflation meant CPI only rose a touch. Meanwhile, …
NBP likely to remain on pause as inflation rebounds The decision by the National Bank of Poland (NBP) to leave its policy rate on hold today, at 5.75%, was widely expected by analysts, and the incoming data are supporting our view that there won’t be …
4th September 2024
After a large fall in July, the EM manufacturing PMI only edged up slightly last month, suggesting that the sector fared worse in Q3 than in the first half of the year. The PMIs did at least provide encouraging signs that price pressures eased. The …
3rd September 2024
Bumper growth in Q2 tilts odds towards rate hike The much stronger-than-expected Brazilian GDP figure for Q2, of 1.4% q/q, means that the economy now appears to be on course to expand by 3% over the year as a whole. The flip side is that it will heighten …
Attention in Egypt is turning to the timing of the first interest rate cut. The lessons from the start of the last easing cycle in 2018 suggest that this is likely to begin in April, which is a little later than most expect. But the more important point …
Slowly but surely, Egypt’s economy is recovering This PMI response has been updated with additional analysis of the UAE's survey published on 4th September. August’s batch of PMIs showed a more positive outturn for the Gulf’s private non-oil sectors, but …
Rebalancing still a bumpy process The Turkish GDP figures for Q2, which showed a better-than-expected 0.1% q/q expansion in output, suggest that the rebalancing process still has some way to go. The data argue in favour of the central bank keeping …
2nd September 2024
This report was first published on 2nd September covering the official PMIs and the Caixin manufacturing PMI. We added commentary on the Caixin services and composite PMIs on 4th September. Growth has stabilised thanks to policy support The PMIs for …
Canada joins tariff hiking club On Monday, Canada announced a 100% tariff on imports of Chinese electric vehicles and 25% tariffs on aluminium and steel. The tariffs themselves won’t have much of a macro impact – the affected goods make up less than 0.1% …
30th August 2024
Chinese lending to Africa increases Data out this week showed that Chinese lending to Africa increased for the first time since 2016. With fiscal policy tight, African economies will welcome more financing. But the region would also benefit from efforts …
Falling house prices and a soft labour market will continue to hold back consumer spending over the coming months. And with the PBOC concerned about a bond bubble, large-scale monetary easing appears unlikely. But a ramp up in fiscal spending and …
GDP figures for Q2 show a sharper-than-expected slowdown in India’s economy. Looking ahead, we expect economic activity to moderate a bit further over the coming quarters. But the big picture is that the economy remains on track to grow by a world-beating …
Further signs of fiscal complacency in Poland The Polish government’s draft budget for 2025 announced this week suggests that fiscal policy will be more expansionary than we had previously expected next year. While that poses an upside risk to our …
Falling fertility bodes poorly for long-run outlook Data released this week showed that Korea's fertility rate (the average number of children a woman is expected to have over her lifetime) dropped further to 0.72 last year (see Chart 1), the lowest of …
Our China Activity Proxy suggests that activity growth edged up in July thanks to a ramp-up in fiscal spending. Policy support will continue to drive a cyclical recovery over the coming months. But once support starts to fade and export growth weakens, …
29th August 2024
Libya’s oil shutdown could influence OPEC+ The oil market was rocked by two political shocks in the past week: an exchange of missiles between Israel and Hezbollah and a crisis in Libya, which led to cuts to its oil output. At the margin, the loss of …
The PBOC appears poised to step up its efforts to prevent bond yields from falling, even though lower borrowing costs would help the economy right now. The inconsistencies in its policy approach are linked to the shifting whims of the Party leadership, …
EM recoveries are beginning to slow and should continue to do so over the coming quarters. Within this there will be regional variation, with Asia the outperformer and Latin America the laggard. Headline inflation rates will end the year above target in …
Modest increase in sentiment The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) generally edged higher in August, which suggests that the regional economic recovery has continued, albeit at a moderate pace, this …
Growth steadies at the start of Q3 The latest Russian industrial production and retail sales figures for July were a mixed bag and suggest that the economy maintained a steady pace of growth at the start of this quarter. But we still think GDP growth will …
28th August 2024
Rates on hold while geopolitical uncertainty remains The decision by the Bank of Israel (BoI) to leave its policy rate on hold again today (at 4.50%) rather than resume the easing cycle, reflects policymakers’ concerns with supply-side constraints in the …
The pick-up in Nigerian GDP growth seen in Q2 will probably be followed by a renewed slowdown this quarter. But we think the backdrop of rising oil production, falling inflation and possible interest rate cuts should set the stage for a more sustained …
Growth in the Gulf economies is likely to pick up in the coming quarters, particularly as oil output starts to rise from October. The outlook will become more challenging from 2025 as oil prices fall back and it becomes more difficult to sustain loose …
Rates left on hold, easing cycle will be more “stop-start” from here The Hungarian central bank (MNB) suggested that its decision to leave the policy rate on hold today, at 6.75%, was likely to mark a temporary pause in the easing cycle, rather than an …
27th August 2024
Nigeria businesses downbeat, but economy turning A CBN business survey published this week suggested that businesses are still downbeat on the economy, but we think slowing inflation and a more stable naira may soon bring some near-term cheer. The …
23rd August 2024
Ukraine’s surprise incursion Ukraine’s incursion into Russia continued this week. Ukraine found a weak spot in Russian defences two weeks ago and mobilised resources to exploit it. The scale of the incursion is significant, with some suggesting that …
Africa Chart Pack (Aug '24) …
RBI Governor pushes back against change to target A longstanding debate in Indian policymaking circles over which measure of consumer price inflation the RBI should target has been reignited in recent weeks. In the Government’s Annual Economic Survey …
The Q2 GDP data out of Emerging Europe have generally disappointed to the downside, and leading indicators have weakened at the start of Q3. With interest rates likely to be kept high in Russia and Turkey over the coming months, we think that a further …
22nd August 2024
