We expect a slow and uneven recovery in non-resident capital flows globally. CEEMEA should fare somewhat better with a broad pickup in ‘20H2 and ‘21. The recovery will likely be driven by stronger FDI and portfolio capital flows. A possible COVID-19 resurgence and geopolitical risks weigh on the outlook. If sentiment worsens, Turkey, South Africa, and Ukraine will be most exposed.

We forecast a deep contraction in 2020, followed by a modest recovery in 2021. The biggest economies, with their large buffers and low debt, are best prepared for the difficult environment. Broadly, the region needs to implement major reforms to improve competitiveness and curtail corruption. 
 

The IIF Sustainable Finance Monitor covers key developments in the global sustainable finance agenda. In the October issue, we discuss the IIF's Taskforce on Scaling Voluntary Carbon Markets and the transition to net zero emissions, share key updates on policy and regulatory developments, the latest on key initiatives, frameworks and tools, our ESG market snapshot, and SFWG activities and events.

COVID-19 highlights the need for structural reform in emerging market sovereign debt financing—and makes it more urgent. High, procyclical funding costs—coupled with lower trend growth—make it difficult to find fiscal space to support sustainable recovery.  Failure to deal with this challenge today could result in much higher future costs for the global economy.

The October 2020 IIF Global Regulatory Update provides updates on current work streams. 

China’s 2060 carbon-neutral pledge is a game-changer in fighting climate change, aligning it with the EU, the UK and others.