Portfolio inflows to Emerging Markets were $38 billion in April. Equity and debt inflows reached $14 billion and $24 billion, respectively. Net capital flows into EM rose to $27.7 billion in March.

Our activity tracker slowed markedly in 2018, but has been broadly stable since September. Tariffs played a limited role in the slowdown, but are finally taking a toll on tradable sectors. Credit-intensive sectors are turning around, suggesting China’s policy stimulus still works.

Frontier market debt rose by over $250 billion in 2018, reaching $3.2 trillion for the 26 countries in our sample. Zambia, Vietnam, and Tunisia saw the largest rise in debt ratios. 

The April 2019 IIF Global Regulatory Update provides updates on the Financial Stability Board along with current work streams in Regulatory Capital, Recovery and Resolution, Cyber Security, Digital Finance, Sustainable Finance, Systemic Risk, Insurance and upcoming events. 

EM assets have enjoyed tailwinds—more dovish Fed/ECB, better growth prospects, attractive valuations… but recent dollar strength and higher oil prices highlight risks ahead; Non-financial corporate EM FX debt up by over $2 trillion since 2009, pushing total EM FX debt to $5.3 trillion; High levels of dollarization reflect declining consumer confidence in Turkey and Argentina

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.