2022 EM outlook: old-school challenges: The MUFG Global Markets Podcast

2021 was a year to remember and a year to forget for emerging markets, which were hit by a series of negative supply-side shocks causing a discernible deterioration in growth-inflation mix, which elevated stagflationary pressures.

Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes that most of the fundamental pressure points from 2021 still linger, and the path of least resistance is to stay cautious on emerging markets in 2022.

In this week’s podcast, Ehsan discusses how some all too familiar old school emerging market issues such as stagflation, fiscal overreach and geopolitical instability are back on the table.

He expects emerging market growth to likely slow as the reopening boost fades, inflation (which caused much of the tightening cycle in 2021) to peak then moderate, whilst rates will continue to rise but be driven more by fears about capital flights – given tightening global financial conditions – than inflation this year.

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