Emerging market growth set to slow considerably this quarter: JPMorgan

NEW YORK (Reuters) – Economic growth in emerging markets will slow “sharply” this quarter, weighed down by China, Russia and the spread of tighter monetary conditions, JPMorgan analysts said on Monday.

“China’s adherence to its COVID-zero policy, Russia’s recession, and tightening global financial conditions will curb emerging market growth sharply this quarter,” Luis Oganes, head of FX research, wrote. commodities and emerging markets, and Jonny Goulden, head of local markets and sovereign debt strategy at JPMorgan.

Emerging market currencies are likely to underperform as the US dollar continues to be strong and there is a risk to economic growth in emerging countries, they noted.

The dollar hit a 20-year high against a basket of developed market currencies on Monday and an emerging market currency index touched its lowest since November 2020.

In local markets debt, the US bank remains underweight as inflation in the region is revised higher, as are expectations of rate hikes as central banks continue to focus on inflation.

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(Reporting by Rodrigo Campos; Editing in Spanish by Javier López de Lérida)

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