An embargo by the EU on Russian crude oil and petroleum products would be impactful. While details are still being discussed, we project meaningful volume reductions in 2022. The final impact over 2022-24 will largely depend on Russia’s ability to redirect exports. Sanctions by the U.S. and EU could make a difference as far as third parties are involved. We estimate Russian exports could be $155 bn lower than the baseline over 2022-24. Uncertainty surrounding this estimate is unusually high due to the number of moving parts.

We track EM trade balances as a proxy for current accounts. Imports increased well past pre-covid levels everywhere, … but strong exports prevente...

Portfolio flows to EM stood at -$4.0 bn in April. Equity and debt flows were -$9.5 bn and $5.5 bn. China equity posted $1.0 bn in inflows. ...

China's inbound foreign direct investment was boosted by strong exports and profits in 2021. Both inbound and outbound portfolio flows shrank in...

Across the mature and emerging markets that we cover in our Global Debt Monitor, non-financial corporate debt is at record high of near $90 trillion—over $12.5 trillion higher than pre-Covid levels; Emerging markets recorded more than half of this buildup in non-financial corporate debt—an increase of some $7.5 trillion since 2019. Of note, Chinese corporates have stepped up borrowing even more in 2022; With the Ukraine-Russia war disrupting the global economic recovery, corporate valuations have come under pressure as global funding conditions tighten rapidly; Fully one-third of small-sized firms in mature markets are already having difficulty covering interest expenses.

China’s RMB has fallen sharply against the Dollar recently, … with many flagging parallels with the “step” devaluation in 2...

The May 2022 U.S. Regulatory Update covers Fed Announcements on government-wide crypto activities, ongoing U.S. sanctions in the Russia-Ukraine conflict, proposed requirements related to climate-related financial risk, and more.

Russia stopped natural gas exports to Poland and Bulgaria on April 27. Disruptions should be limited for Poland due to high storage levels, with more diversified sources, including LNG imports, also factoring in. We do not expect spillover effects to other European countries’ supplies. However, Russia’s energy policy is prompting them to seek other sources.

EM ex China outflows since the war began are not unprecedented. In contrast, outflows from China in Q1 were the largest on record, … and were bro...

The April 2022 edition of the Insurance Update provides targeted updates on IIF insurance activities and events.

Despite weak domestic demands, we expect a moderately narrower current account surplus in 2022, due to rising energy prices. Moreover, under the relatively stable headline numbers, the structure of China's current account is undergoing significant changes.

The rapid buildup in sovereign debt levels over the past 15 years has greatly increased the risk of further debt strains—especially in highly-indebted developing countries—as global rates climb; higher food and energy prices also hurt; Timely sovereign debt workouts are a challenge: studies suggest that official creditors are slower to coordinate in resolving arrears than private creditors—concerning, as a large portion of low-income countries’ debt is owed to official creditors; The updated Principles for Stable Capital Flows and Fair Debt Restructuring offer an effective framework for debt crisis prevention and resolution, highlighting the best market-based practices to promote sustained market access.

We summarize our take-aways from last week’s meetings. Obviously, on the surface, most discussions were about the war, … the effectiv...

An EU embargo on Russian crude oil exports would have a meaningful impact. Oil accounts for one-fourth of Russian exports and around 30% of fiscal revenues. Ultimately, the effect will depend on the country’s capacity to redirect exports. Infrastructure constraints and the threat of secondary sanctions are key challenges. European decision-makers may prefer direct sanctions on the shipping industry. Overall, the EU has a better chance of limiting "seaborne" (vs. pipeline) oil exports.

Growth will accelerate to 5.9% in 2022 supported by higher oil production and prices. The combined current account surplus is poised to surge to 16% of GDP and the fiscal surplus to 7% of GDP. Inflationary pressures remain relatively modest.