Washington, D.C., April 8, 2015 - Emerging market GDP may have grown in Q1 at its weakest pace since early 2009, according to the March update of the IIF's EM Coincident Indicator. The IIF estimates that the EM Coincident Indicator (EMCI) declined markedly in March to 1.8 percent, continuing the weakening trend of past months.
"ggregate EM activity weakened sharply in Q1," said Charles Collyns, chief economist at the IIF." Hard data were generally disappointing although the recent stabilization in financial market conditions provides a glimmer of hope."
Trade data for February/March continued a broad-based decline in growth. The IIF reported that only 1 out of 18 readings that feed into the EMCI were positive for export and import growth, and only 3 showed improvement from last month, notably exports in Brazil and Indonesia.
The IIF noted that industrial production data fell in aggregate, but country details remained a mixed bag. A continued decline in Russia and Brazil and softening in China outweighed further gains in Korea and Poland in February.
The IIF noted that business sentiment slumped in March. With only India registering an uptick, manufacturing PMIs fell everywhere else - including in Brazil, China, Korea, Turkey, and Russia.
On a more positive note, the IIF reported that the common trend among financial market indicators has stabilized in March following seven months of decline, providing cautious optimism for activity going forward.
The weakening in the EMCI is evident across all EM regions, but most notably in Latin America.
The Institute of International Finance is the global association of the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks. For more information visit www.iif.com.