Non-resident flows to emerging and frontier markets will contract sharply in 2020. Remittances have become an important, countercyclical, source of inflows for EM. In 2020, however, they will likely be much lower due to the global nature of shocks. High-frequency data show that the deceleration had already begun in the 1^st quarter. Central America and the Caribbean, the Philippines, and Egypt are most exposed.

Widening fiscal deficits in EM will pose a financing challenge. We focus on funding options in Brazil, South Africa, and Turkey. Banks can fund Tu...

Portfolio flows to EM stood at $4.1 bn in May. Equity and debt inflows were $0.7 bn and 3.5 bn. EM x/ China equity flows remain depressed.

We assess Ghana’s external financing risk as low compared to regional peers. Eurobond issuance and multilateral support help offset impact of COVID-19. As a result, we estimate only moderate reserve losses of $800 mn in 2020. External debt amortization appears manageable this year and over 2021-22. Outflows could be triggered if deficits grow and/or are financed by the BOG.

Shocked by COVID-19 and the plunge in oil prices, the six GCC states will experience their worst recession in history. However, most GCC public sectors and banks are well positioned to absorb the shocks due to their large buffers and aggressive fiscal adjustments. 

With COVID-19 clouding corporate revenue and earnings prospects, highly-leveraged firms will struggle with debt service; 

Non-resident portfolio outflows from EM have been large, amounting to a five standard deviation shock in March and April.

We now expect an even deeper output contraction of 5.7% in the CEEMEA region. Effects of the COVID-19 shock are increasingly visible in the data for March-April. We downgrade growth in South Africa, the Czech Republic, Ukraine, and Russia. The fall in activity prompted authorities to implement fiscal stimulus measures. Together with cyclical revenue weakness, additional spending will widen deficits. CEEMEA central banks cut rates and some began government bond purchases.

We downgraded global and LatAm growth markedly in April, but since then activity has contracted even faster than expected.