EM borrowing costs have fallen, easing fiscal pressure, … but the scope to run permanently wider deficits is limited. Weak growth detracts from th...

The February 2021 Global Regulatory Update provides updates on current work streams. 

The February U.S. Regulatory Update covers President Biden’s financial regulatory agenda, regulatory agency personnel updates, Fed stress tests, the AML Act of 2020, confirmation hearings on Capitol Hill, and more. 

There was a dramatic credit expansion in Turkey last year, … which drove current account deficit widening and reserve losses. This underlying sour...

The kingdom has seen a limited impact of the pandemic due to its low share of services and young population. Non-oil real GDP will grow by 3% in 2021 following a contraction of 2.7% in 2020. The fiscal deficit will narrow to 4% of GDP in 2021, supported by fiscal consolidation and higher oil prices.

Pandemic response helped add $24 trillion to the global debt mountain in 2020, bringing it to a new high of $281 trillion.

Improved market sentiment will allow African sovereigns to return to the market in ‘21. We expect Egypt, Nigeria, Ghana, and South Africa, among others, to issue Eurobonds. However, debt sustainability and liquidity concerns are rising in the context of COVID-19. African countries face Eurobond repayments of close to $100 bn in the coming years. An end to the current low-interest rate environment could make rolling over of debt costly.

The IIF Sustainable Finance Monitor covers key developments in the global sustainable finance agenda. In the February 2021 issue, we discuss how climate policy is taking DC by storm, updates on policy and regulatory developments, and the latest news on market initiatives, frameworks, tools, and research insights. Our Market Snapshot this issue focuses on impact measurement and ESG performance, and we conclude with a summary of key SFWG activities and events.

An emerging consensus says low rates make wide fiscal deficits safe. We examine the argument carefully and show it has some limits. Low rates rela...

We rank the carbon efficiency of mature market economies to see whether significant climate policy changes may be in store; Northern Europe is most carbon-efficient: Denmark, Ireland, UK top the list, followed by Sweden, Norway, and Finland; Belgium, Italy, Portugal, the U.S., and Australia have relatively more work to do to improve carbon efficiency

The Egyptian economy has weathered the COVID-19 pandemic relatively well. Monetary policy was appropriately eased and has some scope for additional support to underpin the recovery. Reining in fiscal deficits and debt will require a commitment to fiscal discipline once the COVID-19 crisis abates. 

We expect Frontier Asia to remain broadly resilient to the COVID-19 shock. Loose monetary and fiscal policies will extend into ‘21 and support growth. However, tourism will continue to weigh on growth and current accounts. Trade tensions and growing debt are the key risks to their economic outlook.

India did not spend much in response to COVID-19 last year, … but plans to boost spending in 21Q1, possibly helping growth. After that we see the ...