Emerging Markets Monitor: Reassuring signs of slowing inflation

We have raised our aggregate GDP growth forecast for EMs in 2023 by 0.2ppts because most performed better than we had expected in Q1 and have remained resilient in Q2. That said, we have scaled back our expectations for growth in 2024 by 0.1ppt.

Although the inflation outlook is slowly improving, domestic growth in most EMs will be constrained by the impact of tighter monetary and fiscal policies, while external demand faces headwinds from the weak outlooks for the US and EU.

What you will learn:

• Short-term outlook: We have lifted our 2023 forecasts for Latin America after the strongerthan expected growth in Q1. But most economies will struggle in H2 as demand still has to fall into line with potential supply if inflation is to fall all the way back to target and stay there.
• EM activity nowcast: The nowcasts continue to highlight robust activity but also regional disparities in growth across EMs.
• Monetary and financial conditions
• Trade and capital flows
• Market developments and asset allocation views
• Sovereign and FX risk
• Key longer-term themes