Nora Szentivanyi and Katie Marney discuss EM’s macro resilience that has been evident in both growth and capital flows holding up well despite this year’s tightening in US financial conditions.  Major emerging market economies are on track to grow 3.1% this year (ex China)–close to trend and easily surpassing our forecasts from this time last year. This striking resilience reflects solid macro fundamentals and balance sheets in addition to responsible fiscal and monetary management which should continue to hold in the coming quarters. As other macro risks will remain contained, our forecasts show that a clear path from resilience to strength exists for EM capital flows next year. The dollar and the Fed will guide the direction for EM investment flows and both point to a softening in financial conditions. If the data do not give the Fed sufficient comfort to ease without a recession, then EM could be tested, but such an episode could prove less disruptive than in the past.

This podcast was recorded on December 6, 2023.

This communication is provided for information purposes only.  Institutional clients can view the related reports at

https://www.jpmm.com/research/content/GPS-4573542-0

https://www.jpmm.com/research/content/GPS-4553723-0

https://www.jpmm.com/research/content/GPS-4553504-0

https://www.jpmm.com/research/content/GPS-4566733-0

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