Argentina introduced capital controls last summer. We draw lessons from the 2011-15 controls episode. Capital flight fell and the central bank bought FX, but reserves were spent absent nonresident inflows. Capital controls will only buy temporary respite.

The formation of a government based on a "cabinet of experts" raises the chances of reforms that could arrest the country’s downward economic spiral and facilitate access to already-pledged concessional loans. However, restoring growth will require additional capital inflows from official sources. 

Fiscal consolidation has been tempered by political reality. Revenue shortfalls and rigid spending could raise funding needs. Financing relies heavily on timely disbursement by official creditors.

Government debt in Sub-Saharan Africa has risen markedly in recent years. This is partly due to issuance of Eurobonds in a low interest rate environment. Debt amortization will peak in 2024-25, while financing needs remain high. As a result, these countries will need to attract significant non-resident capital. Tightening of global financial conditions could increase debt costs substantially.

Equity valuations soared in 2019, as loose financial conditions drove price/earnings ratios higher; By sector, tech and consumer discretionary have seen the biggest valuation gains, health care, banks and utilities have lagged; Early U.S. bank earnings have largely beat expectations, with particular strength in trading revenues, upbeat guidance; Global debt hits record of 322% of GDP in Q319; refinancing this year will top $19 trillion across mature and EMs; Electric vehicle sales growing rapidly alongside declining input costs; market share seen rising to 30% by 2030

Sub-Saharan Africa continues to display stronger growth than other EMs. However, this has not resulted in meaningful real convergence for most. Continued high, though declining, population growth is partly responsible. Higher productivity growth is necessary to improve living standards quicker. Rising indebtedness represents the key risk to the medium-term outlook.