We scan across EM for where – besides Turkey – growth is heavily credit dependent. Colombia, Russia, Indonesia, Brazil and Poland have growth heavily linked to credit.

The April edition of the Insurance Update provides targeted updates on IIF insurance activities and events, and highlights relevant IIF publications or related regulatory developments in other fields. 

Increasing international reserves provide a buffer, but inflows excluding official support are still weak. Amortization is lower in 2019 but still sizable and renewed domestic capital flight remains a risk.

Growth in 2019 will come from ongoing structural reforms to support non-oil activity, as the country has signaled that it will comply with the OPEC+ cuts. Medium-term prospects remain favorable. While the country has a new president, he is expected to remain committed to Nazarbayev's reform agenda. 

Elephant in the room: the U.S. accounts for fully a third of all global government debt; Fewer countries likely to see above-trend growth in 2020; Our new “green flows” tracker shows a sharp pickup for Q1; H1 2019 IIF Survey of Long-term Investors: fewer concerns about trade tensions, China slowdown

The Fed has undertaken a remarkable dovish shift so far this year, which some believe has further to run given this year’s review of policy. From a global perspective, this dovish Fed shift is potentially destabilizing. If the Fed succeeds in running the economy hot, longer-term yields will rise, a downside risk to our already more cautious EM capital flow projections.

The H1 2019 IIF Long-Term Investor Survey was conducted among the IIF institutional investor membership in March 2019.

South Africa’s current account deficit remains wide, and foreign investor positioning is the heaviest in EM. Reserves to deal with these vulnerabilities are limited. High private external assets provide some buffers, as repatriation offsets non-resident outflows partially. External vulnerability is high despite additional buffers.