Stagflation trepidation is accelerating across emerging markets: The MUFG Global Markets Podcast

Expectations for emerging markets were already downbeat at the start of year, centred on stagflation trepidation. However, four months into 2022 and the outturn has been much worse than anticipated. Extensive negative supply-side disruptions, the war in Ukraine, rising commodity prices and a less supportive global liquidity backdrop have markedly deteriorated the EM inflation-growth trade-off.

A drawn-out inflation challenge with more rate hikes, tighter financial conditions and higher borrowing costs leaves a precarious outlook for emerging markets. Ehsan Khoman, Head of Emerging Markets Research (EMEA), advocates that such an environment favours a bottom-up selection process to differentiate outperformers.

Listen in to this week’s podcast as Ehsan elaborates which emerging markets offer the best risk-reward opportunities at the current juncture.

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