Reflecting the rapidly growing demand for sustainability-themed research, we will from time to time be publishing a Green Weekly Insight focused entirely on ESG and sustainable finance. Comments and suggestions welcome!

EU structural funds have boosted growth in Eastern Europe, allowing for strong income convergence with the rest of the EU. Cuts in the 2021-27 EU budget will lead to smaller contributions, but a sudden slowdown is unlikely, and convergence will continue.

Iraq’s path to recovery is inhibited by continuous political instability and a lack of institutional capacity. While the PM has resigned, there is much uncertainty on meeting protesters’ demands for economic and political reforms. The economic recovery from the war has been at a slow pace.

Portfolio flows to Emerging Markets were $20.3 bn in November. Equity and debt flows were $4.4 bn and $15.9 bn, respectively. Net capital flows into EM were -$23.4 billion in October.

Bank lending remains the main policy tool to boost growth. Macroeconomic imbalances seem manageable at this time. Further stimulus, however, could intensify demand pressures.

This note summarizes the major themes and developments from the IIF's Digital Financial Inclusion Summit on November 7th, 2019 in Cairo, Egypt.
 

The PBoC recently lowered interest rates for the first time in four years by 5 basis points, remaining more hawkish than its peers. The PBoC is constrained by elevated CPI, uncertain RMB & outflows, and the housing market. We expect additional slow, gradual interest rate cuts in the coming quarters.