The path to normalisation for emerging markets: The MUFG Global Markets Podcast

Investor sentiment towards emerging markets (EM) has improved thanks to a favourable global liquidity backdrop, supportive technical positioning and rebounding economies. However, EM policymakers are now facing difficult decisions on fiscal policy and monetary tightening as they navigate their recovery plans, with a view to prevent currencies from depreciating further and get growth back on track.  

Ehsan Khoman, Head of MENA Research and Strategy, believes that whilst the EM outlook is more buoyant going into 2021, this is not the time for markets to lower their guard, with a recovery likely to be uneven and highly de-synchronised, with headwinds that can stall the fragile state of affairs abound.

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