Crédito y Caución (Atradius) | After an uncertain start into 2022 due to a new wave of the pandemic, emerging market economies (EMEs) face new headwinds triggered by Russia’s invasion of Ukraine. Growth in EMEs as a whole is forecast to decline from 6.9% in 2021 to 3.7% in 2022. The events in Ukraine come on top of other issues, such as supply chain bottlenecks renewed Covid infections in some…
Trinh D. Nguyen (Natixis) | Here comes the good news: emerging Asia is turning the corner and on its upward trajectory in terms of growth in H2 2020. But increasingly, the pace of recovery from the trough is much slower for some and faster for others, creating widening divergence in emerging Asia. China, Vietnam, Malaysia, and the Philippines to a lesser extent, have shown a rapid rebound from their trough, based on the latest June manufacturing data. Other indicators such as retail sales also confirm this. That said, Indonesia and India are still struggling as the recovery is more sluggish and in contractionary territory. Singapore and Thailand are also lagging but have more buffers to offset drag.
After several sluggish years by their own standards, the emerging economies’ growth rates have once again started to speed up. As seen by Caixabank’s strategists, “the first hesitant signs of this turnaround could be seen in 2016, becoming much more evident in 2017. Emerging growth rates are now expected to consolidate at around 5% over the next few years.”
Bankia Estudios | At end-2016, the emerging economies’ public debt rose to 11.7 trillion dollars, double the level of 2007, reaching 51% of GDP, according to a report from the Bank for International Settlements (BIS). But the composition of that debt is improving and has reduced the risk fuelled by market volatility in uncertain times.
Pablo Béjar | Having transitioned into a more complex global economy, today emerging and developing countries are less economically vulnerable than in the 1980s and 1990s. But how secure are these economies? How much less vulnerable quantitatively and more resilient are countries to macroeconomic crises that battered them over the last 35 years? More specifically, how has the probability of a currency and GDP crisis evolved during these last years?
Mark McFarland (UBP) | Brexit has had a cathartic effect which is likely to continue for a long time. Although Asia as a whole does not have very close links to the UK, the Asian markets are very sensitive to global growth, investment flows and interest rates in US dollars. What happens next in Europe will be crucial for Asia in the next few months.
The Institute of International Finance (IIF) has announced that the emerging economies attracted $36.8 billion dollars of international investment in March, with $17.9 billion earmarked for stock markets and $18.9 billion for bonds.
BEIJING | Alberto Lebrón | When the Asian crisis began in 1997, there were some countries which thought they were unjustly treated. For example, South Korea. Today, nearly twenty years on, the same pattern is being repeated, although the principal actors involved are much better prepared than they were then. But, are the Asian countries ready to face a restrictive monetary cyle imposed by the U.S.?
Could emerging markets spillovers push developed ones into recession?
How will the recent plunge in oil prices affect Asian countries?