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.
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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