Economy Watch | Emerging Markets

Economy Watch: Emerging Markets View (March 2024)

March 19, 2024

2024 GDP forecasts continue to improve, reaching 3% on brightening growth outlooks for the US, China, and India.  PMI indices continue to point to improving economic activity in both manufacturing and services sectors. Rate-cutting momentum continues among the key EM central banks on our watch list with 10 rate cuts vs 4 rate hikes. China’s inflation rate jumped out of the deflation zone, Brazil continued to move in the right direction, and India’s inflation backdrop remained stable. China: The Government set a 5% 2024 growth target despite strong headwinds, but the lack of new stimulus measures casts doubt on whether the target is achievable. India: India’s fourth quarter GDP report showed the economy re-accelerated again, maintaining the strong, post-pandemic momentum. LATAM: Brazil’s growth stall extended into a second quarter; the resumption of Mexico’s disinflation trend raises the probability of a first rate cut this month. MENA: New investment from the UAE triggered reform of Egypt’s fixed exchange rate system, which should boost exports and slow capital flight.