Navigating growth optimism and inflation concerns across emerging markets: The Global Markets Research Podcast

2021-07-30

Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes that we may be beyond peak optimism surrounding growth prospects across the EM complex. Outlook is turning less favourable due to the more transmissible delta COVID-19 variant alongside the moderate slowdown in China having real foundations. In conjunction, we may be approaching peak EM inflation concerns as commodity prices begin to stabilise and core inflation starts to roll off as supply-side constraints ease. This environment suggests a more...

Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes that we may be beyond peak optimism surrounding growth prospects across the EM complex. Outlook is turning less favourable due to the more transmissible delta COVID-19 variant alongside the moderate slowdown in China having real foundations.

In conjunction, we may be approaching peak EM inflation concerns as commodity prices begin to stabilise and core inflation starts to roll off as supply-side constraints ease.

This environment suggests a more normalised EM growth path, but sufficient EM risk premium as some EM central banks are reacting to price pressures while DM central banks remain accommodative.

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