Economists on CNBC | EM Monthly | Migrants and Budgetary Challenges | Decade High Defaults | Asian Corporate Conference | EE Reaches 25K!

Welcome to the latest edition of Essential Economics! We were active again in the media this week. I appeared on CNBC Asia Squawk Box to discuss US growth and monetary policy as well as macro developments in China and India while Vishrut Rana appeared on CNBC Indonesia to discuss the first-round Presidential election and its impact on the economy. Jose Perez-Gorozpe, Valerijs Rezvijs and our emerging markets team released their latest monthly report, arguing that financial and credit conditions are improving. Felix Winnekens and team looked at the budgetary costs of migrants and asylum seekers in several US cities and the potential impact on credit quality. Nicole Serino and Patrick Drury Byrne report that global corporate defaults reached a decade high in January led by consumer products and media and entertainment. We tee up our annual (virtual) Asia corporate outlook conference next week where you can explore China’s new year and Asia’s new cycle. Finally, I’m absolutely thrilled to report that Essential Economics reached a big milestone last week: 25,000 subscribers!

Economists on CNBC: Gruenwald, Rana

The team was active in the media again this week, exclusively on CNBC. I appeared on Squawk Box Asia to discuss US growth and monetary policy, plus a tour of macro developments in China and India. Vishrut appeared on CNBC Indonesia for a wide-ranging interview covering macro and monetary policy as well as the first-round Presidential election results.

To watch Vishrut’s interview, click here .

Emerging Markets Monthly: Conditions Improving

The team writes that credit conditions in emerging markets (EMs) have improved. In the final quarter of 2023, the pace of defaults in EMs was lower than in the U.S. and Europe, following better economic and financing conditions, continued disinflation, positive growth surprises, and a clearer path for Fed policy interest rate cuts.

Despite the shift of market expectations for the start of Fed rate cuts to mid-year from March, EM benchmarks yields remained broadly unchanged in January.

To read the full document, click here .

Migrants and Asylum Seekers Post Budgetary Challenges

Felix and team write that the number of migrants and asylum seekers gaining entrance to the U.S. along the country's southern border is straining government budgets. Although much of the pressure affects localities in border states, some of the largest cities across the U.S., including New York City, Chicago, and Denver, are also feeling the impact.

These cities are adjusting their budgets to accommodate rising expenditures, but without state and federal government support, these costs could pressure credit quality.

To read the full report, click here . ?

To watch Felix discuss the report on CNBC, click here .

Default, Transition and Recovery: January Defaults Highest Since 2010

Nicole and Patrick report that corporate defaults in January posted their highest level since 2010. There were 14 global corporate defaults in the month, well above the long term average. Half of the defaults were from the consumer products and media and entertainment sectors as lower rated issuers continue to struggle.

We are expecting defaults to continue rising in 2024, as rating transitions in the 'CCC+' and below rating category continued to increase throughout 2023.

To read the full report, click here .

Coming Soon: Annual Asian Corporate Outlook Virtual Conference

Please join us on Wednesday, February 21 as S&P Global Ratings will host its annual Asia Corporate Outlook Virtual Conference from 9:00?a.m. to 12:00 p.m. Singapore time.?The program will?feature senior members of our Asia-Pacific corporate ratings teams alongside a distinguished panel of leading market practitioners. Together, they will delve into the outlook for the corporate sectors in China, India, and Southeast Asia.?

This year's theme is "China’s New Year, Asia’s New Cycle".?

To register for this complimentary virtual event, click here .

EE Reaches 25,000 Subscribers!

Finally, Essential Economics reached the 25,000 subscriber mark earlier this week. We are super proud of this milestone and want to thank all of you faithful readers who made it possible!