An almost $10-billion outflow from emerging markets in March will undoubtedly fuel the usual pessimism around the prospects for developing economies in the year ahead – particularly against a backdrop of the ongoing Russia-Ukraine war and anti-inflation moves by hawkish central banks.
The shift out of Chinese assets is significant because the world’s second-largest economy, and largest emerging market, has consistently attracted money, even during tricky times over the past few years, for instance during the protracted US-China trade war which saw the US impose tariffs on Chinese goods and China retaliate – and the turn in the tide of sentiment against China in the early stages of the pandemic.
Investors’ caution is primarily based on inflation posing a “persistent puzzle” for major central banks, according to the survey, with a vast majority seeing it as unlikely that market inflation will revert to pre-pandemic levels. As a result, 60% saw the US Federal Reserve’s response to higher inflation by hiking interest rates and reducing its balance sheet reduction as the biggest risks to emerging market performance this year.
Again, JPMorgan’s headline emerging market growth forecast and HSBC’s cautious-to-bearish emerging market sentiment survey outcome doesn’t reflect the likely economic reality of all emerging market regions, with conditions on the ground in Asia, Latin America and South Africa markedly more positive. The latter two are expected to benefit from their commodity-rich status and Asia’s relative stability is viewed as positive against a turbulent global backdrop.
• There’s no greater joy than having financial freedom and a life free of debts, that’s why I Zaza posting comments about AdamTrey01 who guided me trading onlin
Everyone keep talking about your diligence and honesty and I must say that you are very transparent in your mood of operation and promises, thank you MarkdonaldTowns for transforming my life for the best financially.