Over the last few weeks, there has been a substantial correction in EM assets in general. Although much of this may have had a lot to do with positioning, we believe the current environment also bears various resemblances to the turbulent period for EM assets that began in 1994, when the Federal Reserve tightened monetary conditions after a prolonged “balance sheet recession” that had begun in 1991.
Africa’s boom has been aided by favourable external conditions which are coming to an end, according to a new paper from credit rating agency Standard & Poor’s. Governments should grasp the opportunity offered by favourable conditions on global markets to make progress on structural challenges that have been masked by the boom years, S&P warns. Continue reading »
Argentina was prosperous just 100 years ago but it now finds itself outside the club of rich nations. Stephen King, chief economist at HSBC, talks to Long View columnist John Authers about whether other countries should fear an Argentine scenario.
From the ‘hopeless’ to the ‘hopeful’ continent, a decade of strong growth has changed perceptions of sub-Saharan African economies – not least among international investors, who have rushed to recent Eurobond offerings from the likes of Zambia and Rwanda. Rubbing against the optimism though are criticisms that the growth achieved has been far from inclusive, with human development lagging behind. Chart of the week takes a look. Continue reading »
It may have gone unnoticed by many amid the turmoil of the eurozone crisis, but four years after signing its first loan agreement with the International Monetary Fund, the European Commission, the World Bank and other international financial institutions, Romania has a much healthier economy. Yet it is still far from a happy ending. Continue reading »
Polish retail sales slumped in April according to figures released on Friday, falling by an annual 0.2 per cent, worse than consensus which had been for a 1.1 per cent increase, in yet another indication of the severity of the slowdown hitting the Polish economy. Continue reading »
A note from Capital Economics on Friday suggests the economies of central and eastern Europe may finally be emerging into the light.
Or at least its title does (Emerging Europe: Slump in regional growth may be bottoming out). Its message, though, is that while recent GDP figures may have given grounds for that kind of hope, growth is extremely weak and any recovery is likely to be sluggish and uneven. Continue reading »
Russia the next Greece? It sounds like a long shot. But Russia the next Greece as the subject of a report from an investment bank that specialises in marketing Russian assets? That sounds like a shot in the foot. But it is precisely what Ivan Tchakarov of Moscow-based Renaissance Capital published on Tuesday. And he has solid arguments to support his self-destructive thesis. Continue reading »
The Czech Republic is in a terrible downturn that shows no sign of coming to an end with new flash GDP data showing a first quarter annual contraction of 1.9 per cent, much worse than analysts had predicted and the Czech economy’s worst performance since the depths of the first wave of the crisis in 2009. Continue reading »
Bad GDP figures from the eurozone on Wednesday but there’s a pleasant surprise from an unexpected quarter: Hungary’s economy contracted by only 0.9 percent in annual terms in the first three months.
Doesn’t sound like good news. But investors had been expecting a drop of as much as 1.4 per cent. With hopes of further improvement in the rest of 2013 buoying the Budapest market, the forint gained 1 per cent against the euro. Continue reading »
Should Poles be getting out their umbrellas, or will a simple spring coat suffice? That’s the question as a debate begins over whether the clouds hanging over the Polish economy are merely grey or a much darker hue.
The gloomier forecast comes form the European Commission, which sees Polish growth slowing to 1.1 per cent this year followed by a recovery of 2.2 per cent in 2014. It correct, that lacklustre growth rate will have dire consequences for the country’s public finances. Continue reading »
More evidence of global economic slowdown, as if we need it.
Taiwan on Tuesday announced a plunge in GDP growth to 1.5 per cent year-on-year in the first quarter of 2013, less than half the 3.7 per cent in the previous quarter and well below forecasts of 3.1 per cent.
By global standards, Taiwan is a smallish economy. But with its trade links to the rest of the world, it serves as a useful harbinger. And this is not good news. Continue reading »
The arguments predate the global financial crisis, but are given fresh urgency by the crisis-induced deceleration in growth. According to the IMF, there’s bad news and good news. The bad news is that some emerging Asian economies do indeed face significant risks of a “sustained slowdown”. But the good news is that they are less vulnerable than emerging economies in other parts of the world – and that given the right policy choices, they can try to avoid stagnation. Continue reading »
With oil prices dropping below $100 a barrel this week Russia’s economic growth story is looking dodgy. The economy ministry has already downgraded its forecasts for full year 2013 growth from 3.6 per cent to 2.4 per cent and warned of the risk of recession. First quarter economic results released on Wednesday were mixed but not encouraging. Continue reading »