Washington, D.C., March 10, 2015 - Emerging market GDP growth is moderating further according to the February update of the IIF's EM Coincident Indicator. The IIF estimates suggest that growth will moderate to 2.6 percent in Q1 2015 down from an estimated 3.4 percent in Q4 2014 and 4.3 percent in Q3.
"The persistent downward trend in financial market variables and hard data suggests that EM growth is continuing to sag at the start of 2015," said Charles Collyns, chief economist at the IIF. ' "However, business confidence has been more resilient and we still expect a strengthening in activity later in the year."
The IIF reported that financial market data pointed squarely to weaker EM growth, as commodity prices, equity prices, and currencies continued to slide.
Trade data for January/February also indicated a broad-based decline in quarterly growth. By contrast, while industrial production data also softened, cross-country readings were more mixed, as further declines in Russia and Brazil were accompanied by a sustained improvement in Poland and Korea.
Business sentiment softened only marginally in February, as the broad-based improvement in EM Europe contrasted with the declines in India and Brazil.
The weakening in the EMCI was 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. Within its membership IIF counts 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.