EM Vulnerabilities Monitor: a new tool to gauge post-pandemic risks

In Short

EM countries have always been a heterogenous complex, exhibiting various strengths and vulnerabilities in different sectors that can lead to an economic and financial crisis in the worst case. It is even more critical to track and characterise EM country's vulnerabilities in the post-pandemic period.
Focal Point

Highlights:

  • We present our new EM vulnerabilities monitor to assess strengths and weaknesses across the EM complex. Our monitor is using a straightforward quantitative method : we focus on the build-up of imbalances, highlighting the principal vulnerabilities through time and countries. We do not try to predict the occurrence of a crisis. 

  • EM vulnerabilities have been increasing slightly since 2013. However, the structure of the vulnerabilities has changed. Risks are now stemming from the macro and fiscal sectors rather than from the external sector. EMs appear to be less vulnerable to a rise of core yields than in 2013. 

  • Latin America and Africa present the most significant vulnerabilities in conjunction with weaker external factors and a sharper deterioration of the macro and fiscal environment. Turkey, Brazil, and South Africa are unsurprisingly the countries with the highest level of vulnerabilities.

Download the full publication below:

Focal Point ǀ EM Vulnerabilities Monitor: a new tool to gauge post-pandemic risks

Also interesting

Picture

© Generali Investments, all rights reserved. This website is provided by Generali Investments Luxembourg S.A. (Generali Investments) and is considered as a marketing communication and financial promotion related its products and services. Moreover, the website may contain marketing communication and financial promotion of products and services of companies part of the multi-boutique platform coordinated by Generali Investments Partners S.p.A. Società di gestione del risparmio, and in particular of Generali Global Infrastructure, Sycomore Asset Management, Aperture Investors LLC., Plenisfer Investments SGR, Lumyna Investments and Generali Real Estate S.p.A. Società di Gestione del Risparmio.