Diverging Paths

Aggregate EM GDP growth will enter a slower phase over the coming quarters. But the headline figure masks an unusually large variation in prospects at a country level. Many of the EMs that fared surprisingly well in 2023, including Brazil, Turkey and Mexico, are set to slow and by more than most expect. Set against that, others, such as Central Europe, the Andean economies, as well as China, are likely to recover after recent weak patches. While the disinflation process is likely to become slower in the coming months, the EM monetary easing cycle should broaden out over the course of 2024.