From global markets to questions of development, money and economic activity.
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Emerging economies entered the Ukraine war with stronger external buffers than in several earlier global shocks. Jonathan Fortun and Sergi Lanau compare current accounts, export performance and reserves against financing needs. Their March 2022 assessment anticipates wider deficits for commodity importers such as India, while distinguishing those pressures from the vulnerabilities preceding the 2013 taper tantrum.
Read the workNew inflation breadth indices measure the weight of consumer basket components experiencing high inflation across major G10 economies. The February 2022 results show that US price pressures had spread well beyond isolated energy or supply bottlenecks. Inflation was also broadening in the euro area despite large output gaps, with Germany identified as an important source of overheating.
Read the workThe report assesses India's FY23 budget, balancing gradual fiscal consolidation and investment support against longer-lasting pressures on yields and debt issuance.
Read the workChile’s policy stance was shifting sharply after fiscal expansion helped overheat the economy. In February 2022, Jonathan Fortun and coauthors assessed how simultaneous fiscal and monetary tightening could cool demand. They estimated that the extraordinary budgeted spending cuts could subtract five percentage points from growth and two from inflation, and expected overheating to end in the second half of 2022 despite continuing social challenges.
Read the workExamines why European bank loan quality held up during the pandemic and considers policy responses as extraordinary support is withdrawn.
Read the workChina’s evolving interest rate framework links central bank decisions to benchmark and market rates. In this January 2022 report, Phoebe Feng, Jonathan Fortun, Gene Ma, Jonathan Pingle and Robin Brooks explain the roles of the rates used in that transmission mechanism. They identify the open market operations and medium term lending facility rates as the main policy instruments, describing how the different parts of the framework fit together.
Read the workThe recovery from COVID differed sharply across economies in January 2022. Robin Brooks, Jonathan Fortun and Jonathan Pingle attributed the comparatively complete US rebound largely to aggressive fiscal stimulus, with consumption and investment above their levels at the end of 2019. Their comparison of advanced and emerging economies warned that the euro area appeared headed for a major investment slump, comparable to weaknesses in South Africa and Colombia.
Read the workEquities dominated emerging market portfolio inflows at the end of 2021. Jonathan Fortun’s January tracker reports $16.8 billion in total December inflows and highlights $12.5 billion entering Chinese stocks. Debt attracted comparatively little investment, making the recovery heavily dependent on equity demand.
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