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Economic Views: The COVID-19 Shock to EM Flows

Jonathan Fortun · Sergi Lanau / Institute of International Finance

Real time indicators showed an exceptionally severe flight of capital from emerging markets as the pandemic escalated in March 2020. Jonathan Fortun and Sergi Lanau compare the outflows with earlier global and Asian crises. They anticipated reserve losses and narrower current account deficits as access to external financing contracted.

Valor Econômico · Quoted expert PTOriginal title: IIF alerta para risco de “parada súbita” nos mercados financeiros

IIF alerta para risco de “parada súbita” nos mercados financeiros

Valor reports Fortun and Robin Brooks's warning that the pandemic could produce an abrupt interruption in global financing.

EL PAÍS Brasil · Quoted expert PTOriginal title: Coronavírus desata, em 45 dias, a maior fuga de capitais da história entre emergentes. Brasil é o que mais sofre

Coronavírus desata, em 45 dias, a maior fuga de capitais da história entre emergentes. Brasil é o que mais sofre

Fortun comments on the exceptional scale of early-pandemic capital flight and the particular exposure of Brazil and other Latin American economies.

The National · Quoted expert

Capital flows to emerging markets see 'dramatic collapse' as virus spreads

The article cites Fortun and Benjamin Hilgenstock's IIF analysis of the abrupt deterioration in emerging-market investment flows as the pandemic spread.

Money Times · Mention PTOriginal title: Coronavírus: Brasil é um dos poucos que pode “vacinar” a economia com crédito

Coronavírus: Brasil é um dos poucos que pode “vacinar” a economia com crédito

Coverage of a study by Fortun and Robin Brooks explores the relationship between credit expansion and economic activity in Brazil and other emerging economies.

Global Macro Views: Credit Expansion in Turkey

Jonathan Fortun · Robin Brooks · Ugras Ulku / Institute of International Finance

Repeated credit expansions supported Turkey’s growth while weakening its external balance. Jonathan Fortun, Robin Brooks and Ugras Ulku trace how the 2017 boom widened the current account deficit ahead of the 2018 sudden stop, and how renewed lending in early 2019 again worsened external dynamics. Writing in February 2020, they warned that another expansion appeared underway, adding balance of payments risks with likely smaller growth benefits.

Global Macro Views: The EM Investment Slump

Jonathan Fortun · Robin Brooks / Institute of International Finance

Weak investment threatened to make the emerging market growth slowdown more persistent in January 2020. Jonathan Fortun and Robin Brooks survey investment across emerging economies and find aggregate growth in investment near zero. Turkey, Argentina and Mexico showed especially pronounced weakness, linking the broader stagnation debate to the accumulation of productive capacity.

GMV: Crisis versus Secular Stagnation EMs

Jonathan Fortun · Robin Brooks / Institute of International Finance

Weak emerging market growth reflected two different problems: acute crises and a more persistent investment slowdown. Jonathan Fortun and Robin Brooks distinguish these groups in their January 2020 assessment. They focus on Mexico and South Africa, where weak investment risked turning a recent slowdown into a structural constraint on growth.