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The May 2024 forecast anticipates renewed nonresident investment in emerging markets as their growth and interest rate outlook improves relative to advanced economies. Direct investment remains the main source of external funding, with portfolio investment also recovering unevenly across regions. Weaker growth, geopolitical tensions and delayed Federal Reserve easing remain key risks to the baseline.
Read the workApril 2024 saw $8.2 billion in net portfolio inflows to emerging markets. Debt attracted $12.1 billion, offsetting equity withdrawals of $3.9 billion, including $0.6 billion from Chinese stocks. The positive aggregate therefore reflected bond demand rather than a recovery shared by both major asset classes.
Read the workFortun describes multiple parallel exchange markets emerging in Bolivia as dollar scarcity affects transactions and cross-border payments.
View detailsThe evolution of global trade has made emerging economies increasingly important to international production networks. Regional fragmentation and the pandemic exposed weaknesses in those networks. The May 2024 overview examines how emerging markets respond to trade barriers and sanctions, creating new connections while established trading patterns diverge.
Read the workDiscussions at the 2024 Spring Meetings combined concern about fragmentation and political risk with recognition of US economic strength. That resilience also complicated the outlook for monetary easing. A prolonged period of high Federal Reserve rates could strengthen the dollar, raise borrowing costs and weaken the prospects for international capital flows.
Read the workFortun explains how bond issuance, carry trades and demand for local-currency debt supported March inflows, while US policy uncertainty clouded the outlook.
View detailsZonebourse published this French article on 2024-04-23. It mentions Jonathan Fortun in an IIF economics context. Read the original source for the complete reporting.
View detailsReuters reports that emerging market portfolios received $32.7 billion in foreign inflows in March 2024, with debt attracting more than equities. Jonathan Fortun attributes stronger debt flows outside China to issuance by a small number of countries, carry trades and demand for local currency bonds. Rodrigo Campos’s report also notes a modest return of inflows to both Chinese stocks and bonds.
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