The EM Edge economies are a diverse group across the globe—from investment-grade countries, including some large oil-exporting economies, to sovereigns long since in financial distress. In between are many frontier markets with varying degrees of vulnerabilities. Understanding external financing needs and sources is a critical piece of the analytical puzzle for such economies, where funding needs, external and domestic, act as binding constraints that shape economic policies.

This year brings signs that several sources of stress that have buffeted emerging markets could be ebbing: global food and energy inflation are slowing. Reopening in China may help offset downside risks to growth elsewhere. Signs that inflation has peaked in the US have raised hopes for a soft landing that would allow the Fed to relax its hawkish stance. Important risks remain, however, including a scenario in which disinflation stalls and global central banks continue tightening. With this in mind, we discuss external funding needs across Edge economies this year and invite two of our Edge Economists, Gbolahan Taiwo and Jin Tik Ngai, to dive more into Egypt and Pakistan.

Speakers

Nicolaie Alexandru-Chidesciuc, EM, Economic and Policy Research

Ben Ramsey, Emerging Markets Economic and Policy Research

Katherine Marney, Emerging Markets Economic and Policy Research

Gbolahan Taiwo, EM, Economic and Policy Research

Jin Tik Ngai, Emerging Markets Asia, Economic and Policy Research

 

This podcast was recorded on 30 January 2023.

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