The Covid-19 crisis is far from over. On Tuesday January 11, the World Bank revised its global growth forecast for 2022 down by 0.2 point to 4.1%, after 5.5% in 2021. If all countries in the world are affected by this decline, Ayhan Kose, the institution’s economist, insisted on their divergent trajectories: “Advanced countries are flying high while emerging markets and developing economies are flying low and lagging behind. ” The International Monetary Fund (IMF) is worried about “Possible economic turbulence” that could shake up emerging economies in the months to come. In a note published Monday, January 10, the Washington-based institution highlights in particular the risk of a tightening of US monetary policy, faster than expected, which could lead to a flight of capital from emerging economies and a devaluation of their currencies. .
A scenario that is likely to occur if overheating supply chains fail to absorb shortages and if price increases accelerate in the United States, after having already reached 6.8% in one year in November 2021 At the beginning of January, the Fed suggested that its monetary tightening would be more important and rapid, and warned that it could, as of March, increase its key rates.
This acceleration of the schedule could, according to the IMF, “Shake up the financial markets”. The most exposed countries are those with “High levels of private and public debt, and exposure to currency fluctuations as well as weaker current account balances”, continues the institution. The day after the publication, Wednesday January 5, of the minutes of the last meeting of the Fed, the prices of the Turkish lira, the Thai baht and the Malaysian ringgit also fell.
Rebalance the external accounts
A rise in US rates could force capital out of emerging countries when they need it to finance their fragile recovery. It could also force them to take the same directions to avoid capital flight and a collapse of their currencies. At the risk of sacrificing their recovery. In July 2021, the IMF calculated that the world’s gross domestic product (GDP) could lose 4.5 trillion dollars (3.970 billion euros) if such a decision was taken before the pandemic was contained in emerging countries. In 2013, it caused a financial storm among emerging countries.
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