Emerging markets macro resilience: beware fading global tailwinds

Emerging markets have benefited from the global stimulus rolled out in response to COVID-19, but will need to rely on their own economic resilience as strict virus containment measures continue. Replenishing resilience buffers should be a priority.

Key takeaways

  • Emerging markets have lost less than 10% of their economic resilience due to COVID-19, versus 25% for advanced economies.
  • They have benefited from advanced economy stimulus responses, which have supported aggregate demand and eased financial conditions.
  • China is the only major economy for which resilience is unchanged by COVID-19 as swift containment measures led to faster resumption of activity and less need for stimulus.
  • Emerging markets will need to rely on domestic resilience as further global stimulus is unlikely and containment measures remain strict.
  • Looking ahead, strengthening domestic resilience will be of utmost importance.

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Economic Insights Emerging markets macro resilience: beware fading global tailwinds

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