RaboResearch - Economic Research

Economic Update

Impact of tapering on emerging markets

In this Economic Update we take a closer look at the impact of the gradual slowing down of the rate of asset purchases by the US Federal Reserve (Fed) on the emerging markets.

Economic Update

Russia: Economic slowdown continues

Russia’s economic activity has continued to slow in 13Q3 and we expect growth in 2013 as a whole to be around 1.5%. The economic slowdown is starting to adversely impact public finances. The central bank has left rates on hold for now, despite falling inflation.

Country Report

Country Report Indonesia

The third free presidential elections in Indonesia’s history (1H2014) will bring a new president into office, as Yudhoyono is barred from participating after completing two terms. There is no clear favorite, increasing policy uncertainty. Also, the external position is weakening.

Country Report

Country Report Taiwan

Due to a weak external environment, Taiwan’s economy has been performing weakly, but a slight growth acceleration is expected. Political infighting in the ruling KMT party has weakened the president’s position and will hamper policy implementation.

Country Report

Country Report China

Growth in China is rebounding but, unfortunately, still driven by investment growth on the back of government stimulus and credit growth. The government thus still prioritizes on short-term growth, which makes implementing reforms a difficult task.

Economic Update

India: Battered but not beaten

Tapering talk has sent the Indian rupee to record lows, but India is not a blameless victim. It struggles with fundamental issues constraining economic growth, large twin deficits and declining investor confidence on the back of inadequate reforms.

Economic Update

Emerging markets – US tapering has a big impact

US tapering is leading to portfolio outflows in emerging markets, especially in countries that are running both a current account and budget balance deficit.

Country Report

Country Report India

The market anticipation of Fed QE tapering has sent the Indian rupee to record lows. However, India is not a blameless victim. It struggles with fundamental issues constraining economic growth, large twin deficits and a declining investor confidence on the back of inadequate economic reforms.

Country Report

Country Report South Korea

Supported by government measures, real GDP growth in South Korea has been accelerating. Meanwhile, tensions with North Korea have eased, for now. South Korea’s banking sector remains vulnerable to external liquidity risks and rising household debt.

Country Report

Country Report Sri Lanka

Although economic growth in Sri Lanka slowed down last year, elevated inflation remains a concern. While both the budget deficit and the current account deficit declined slightly in 2012, both deficits remain large.

Country Report

Country Report Mongolia

Mongolia’s economy slowed in 2012 on the back of lower demand from China and slowing FDI inflows. The government has implemented policies to support growth. A more cooperative stance towards foreign investors should help to regain their confidence.

Economic Update

Emerging Markets: weak external demand

Struggling with weak external demand, many emerging markets are showing relatively weak economic growth. However, in others, strong domestic demand, private or public, is pushing growth to relatively strong levels.

Economic Update

India: Weak recovery after disappointing year

In 2012-13, growth in India fell to the lowest rate in a decade. We expect a modest recovery going forward. A favorable monsoon is likely to boost growth somewhat, but the current account deficit constrains the room to apply (further) stimulus.

Country Report

Country Report Philippines

The Philippines has managed to maintain macroeconomic stability despite a weak external environment. Meanwhile, helped by large and steady remittances inflows, the country’s external (liquidity) position remains strong.