Emerging Markets charts and views: Winners and losers in a pivotal year for Emerging Markets

“The growth premium over Developed Markets is at its highest levels in almost five years, and is expected to continue widening next year despite the global economic slowdown.”

Emerging Markets charts and views- Winners and losers in a pivotal year for Emerging Markets

EM Growth Premium

At a time when the growth outlook for advanced economies is gloomy, EM shows growth resilience for 2024, with the EM-DM growth premium remaining in favour of EM and widening to its highest gap in 5 years. At the same time, inflation is trending lower allowing for a continuation of the easing cycle that EM Central Banks initiated in 2023.

Easier monetary policy

”Many EM Central Banks have already started to cut rates and further cuts are expected in 2024, supported by a disinflationary trend across EM.”

The EM picture remains scattered in terms of inflation and monetary policy, reinforcing the view of EM fragmentation. However, some countries are well advanced in their monetary policy normalisation. In this such respect, LatAm launched the easing cycle, with Brazil, Chile and Peru cutting rates in 2023 amid lower inflation and a decelerating economic cycle.

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