The IIF covers 30-40 emerging and frontier markets, with a particular focus on economic and financing issues. Our reports feature topical analysis of macroeconomic fundamentals, policy developments, political economy dynamics and downside risks.
COVID-19 has exacerbated existing external pressures on Nigeria. Despite external support, we expect reserve losses of $8 bn in 2020. The c/a deficit remains significant in the context of low oil prices. At the same time, global risk-off behavior weighs on capital flows. Debt amortization and large fiscal deficits increase financing needs.
We expect the IMF to approve, in the coming weeks, the Egyptian authorities’ request for financial assistance through a Rapid Financing Instrument (RFI) and a Stand-By Arrangement (SBA). This financial support package would help strengthen confidence in the economy and meet large financing needs.
COVID-19 is exacerbating existing vulnerabilities in Sub-Saharan Africa. The global recession and drop in commodity prices hit the region hard. We present a framework to summarize SSA’s exposure to different risks. Multilaterals need to play an important role in the region going forward.
We project a deep recession in 2020 due to COVID-19 and the plunge in oil prices. Saudi Arabia can accommodate widening deficits given its large financial buffers and low debt.
This note analyzes the fiscal tools that China has used in recent years and examines whether there is room for further fiscal expansion, especially against the backdrop of the COVID-19 pandemic.
Growth across Sub-Saharan Africa is expected to slow down markedly. This is a result of lower global demand and falling commodity prices. Lower growth will inhibit advances in living standards across the region. We are concerned that COVID-19 outbreaks in SSA could be disastrous. Multilateral support, including from the IMF, is needed going forward.
COVID-19 is projected to bring about a 4.7% output contraction in 2020. This is partly the result of the looming deep recession in the Euro area. Virus containment measures will also lead to weaker domestic demand. Markedly wider fiscal deficits could intensify debt sustainability concerns.
The OPEC+ bloc agreed to cut oil production by a record 9.7mbd. Assuming full compliance, we expect Brent crude to average $40/bbl in 2020. Cuts will last through April 2022, at lower levels. Major non-OPEC+ producers will cut by up to 3.5mbd. Inventories should peak in Q2 and then drop in H2.
COVID-19 has affected Latin America through multiple channels. Pre-existing challenges and increased exposure put the region in a difficult position. We project a deep recession this year amid a sudden stop in capital flows and limited policy space.
Russia’s fiscal breakeven oil price, around $40/bbl in 2020, is the lowest among major oil exporters. While Saudi Arabia’s fiscal and external breakeven prices should decline due to a cut in non-priority spending and a fall in imports, fiscal breakeven prices remain well above $60 in much of MENA.