Holdings of U.S. Treasuries have increased, driven by portfolio restructuring in GOSI and the PIF. As across the GCC, public foreign assets exceed official reserves of the central bank. A further increase in the PIF’s assets abroad is set to improve the country's international investment position. 

In this short overview, we highlight climate risks to financial stability; Even in a benign scenario, some $2.5 trillion of global financial assets are estimated to be at risk from the impact of climate change; A low-carbon transition can have a substantial positive net growth effect on GDP, outweighing costs... but transition and physical risks are growing as countries fall behind on emission targets

China currently faces headwinds to growth from both US tariffs and weaker domestic consumption. Compared with 2016, another period of soft exports and weak demand, many cyclical indicators—such as investment and retail—are weaker now, but structural indicators are more promising. 

A fiscal stimulus program provided support to private consumption and growth in early 2019. Accommodative policies are expected to continue through 2020, helping growth to remain robust. One-off revenues and cyclically strong tax collection will mask the deterioration in fiscal discipline. 

EM productivity growth has been sluggish, mirroring well-documented patterns in DM. China’s productivity outperformed peers, but is slowing in line with global trends.

Portfolio flows to Emerging Markets were -$5.7 billion in May. Equity and debt flows were -$14.6 billion and $9 billion, respectively. Net capital flows into EM were -$2.8 billion in April.