The fragile 10: Turbolences but no crash

A perfect storm? The tapering by the US Fed, the slowdown of demand in China and anticipated elections around the globe have caused (in that order) some new concerns about emerging markets (EM). In spite of the impact on the stock markets, currency slides and rate hikes, a collective crash is not an option.

The situation will stabilize but selected second-round effects are to be expected, notably for businesses through financing and non-payment risks. Vulnerability related to capital outflows is common for EM but the right policy toolkit can protect growth and the private sector. To watch - Our Fragile 10: Argentina, Indonesia, Turkey, Brazil, South Africa, India, Chile, Colombia, Philippines and Mexico & our Weak 4: Thailand, Russia, Ukraine and Venezuela.