Emerging Markets: Prospects and Challenges

Download or read book Emerging Markets: Prospects and Challenges written by Tryggvi Gudmundsson and published by International Monetary Fund. This book was released on 2022-02-18 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article documents recent developments in emerging markets in the context of the COVID-19 pandemic, assesses their prospects and challenges, and discusses appropriate policy settings for the medium term. It argues that EM policymakers’ ability to grapple with an incomplete and uneven recovery will be constrained by high public debt and uncertain inflation prospects as well as external risks surrounding capital flows and exchange rate developments. The paper also discusses potential impact of a tightening in global financial conditions and appreciation of the US dollar that could be triggered by a general increase in risk aversion or a reassessment of the likely path of US monetary policy.