Despite having to navigate the (i) war in Ukraine (and its reverberations on global energy and food prices); (ii) aggressive rate hikes; as well as (iii) draconian Chinese lockdowns, emerging markets demonstrated remarkable resilience in H1 2023.
Yet, in a world of tightening global financial conditions and questions about the liquidity implications of the now-finalised US debt ceiling, Ehsan Khoman, Head of Commodities, ESG and Emerging Markets Research (EMEA), expects a heightened degree of macro risks for emerging markets in H2 2023, with external funding requirements the central concern. Still, he believes the silver lining is that subdued growth should cap inflation, facilitating monetary policy easing where external balances allow.
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