Emerging Markets: Prospects and Challenges

By Tryggvi Gudmundsson, Vladimir Klyuev, Leandro Medina, Boaz Nandwa, Dmitry Plotnikov, Francisco Schiffrer, Di Yang

February 18, 2022

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Format: Chicago

Tryggvi Gudmundsson, Vladimir Klyuev, Leandro Medina, Boaz Nandwa, Dmitry Plotnikov, Francisco Schiffrer, and Di Yang. Emerging Markets: Prospects and Challenges, (USA: International Monetary Fund, 2022) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This article documents recent developments in emerging markets in the context of the COVID-19 pandemic, assesses their prospects and challenges, and discusses appropriate policy settings for the medium term. It argues that EM policymakers’ ability to grapple with an incomplete and uneven recovery will be constrained by high public debt and uncertain inflation prospects as well as external risks surrounding capital flows and exchange rate developments. The paper also discusses potential impact of a tightening in global financial conditions and appreciation of the US dollar that could be triggered by a general increase in risk aversion or a reassessment of the likely path of US monetary policy.

Subject: COVID-19, Emerging and frontier financial markets, Exchange rates, Financial markets, Foreign exchange, Health, Inflation, Prices, Public debt

Keywords: COVID-19, EM inflation, EM NEER, EM policymakers' ability, Emerging and frontier financial markets, Emerging market bond yields, Emerging markets, Exchange rates, Global, Inflation, Monetary Policy, Monetary policy tightening

Publication Details

Pages:

22
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2022/035
Stock No:

WPIEA2022035
ISBN:

9798400203954
ISSN:

1018-5941

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