“EM, excluding China, is flatlining,” the economists wrote. “A deep downturn is the likely result in 2020, given the sharp sudden stop in EM inflows. Underlying all these forecasts is profound uncertainty as to how virulent the Covid-19 pandemic will be in EM.”
Equities in developing nations have erased $5.2 trillion, sovereign-bond risk has risen to an 11-year high and new borrowing has stalled as the coronavirus pandemic shuts down entire nations and brings the world economy to a standstill.
Several countries have announced monetary and fiscal stimulus packages, and the Federal Reserve has let loose unlimited quantitative easing. Yet, markets are in a state of panic as the depth of economic slide is still unclear.
For now, IIF’s projections for 2020 growth are:
| Economy | Real GDP growth |
|---|---|
| World | -1.5% |
| Emerging Markets | 1.1 |
| EM Ex-China | 0.0 |
| Economy | Real GDP growth |
|---|---|
| Latin America | -2.7 |
| Argentina | -3.1 |
| Brazil | -1.8 |
| Mexico | -2.8 |
| Economy | Real GDP growth |
|---|---|
| CEEMEA | -0.5 |
| Russia | -1.3 |
| Turkey | 0.6 |
| South Africa | -2.5 |
| Economy | Real GDP growth |
|---|---|
| Asia/Pacific | 2.4 |
| China | 2.8 |
| India | 2.9 |
| Indonesia | 2.7 |
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