Economy Watch | Emerging Markets

Economy Watch: Emerging Markets View (January 2024)

January 15, 2024

The global economy faces slower growth in 2024 as effects of recent rate hikes materialize, but growth should recover in 2025 as tightening is reversed. The latest PMI indices show no change in stalled manufacturing momentum, but a renewed pick up in services.

December was a busy month with 15 of 21 EM central banks we track having year-end policy meetings on the schedule EM inflation is still less correlated compared to the major DM economies highlighting a greater degree of idiosyncratic macro drivers.

China: Consumer and producer price indices show persistent deflationary pressure indicating a growing demand/supply imbalance.

India: Persistent current account deficits may find easier financing with India’s inclusion in JP Morgan’s Global Emerging Markets bond index.

ASEAN: Singapore opened the Q4 national accounts reporting season and did so by showing a solid acceleration in quarterly GDP growth.

Mexico: The growth trend looks steady heading into the 2024 election year, but a US recession could weigh on Mexico’s growth performance mid-year.