Economists in the News | Look Forward: EM Decade Ahead | EM Monthly: Fed Easing | Swedish Blueprint for Europe | Argentina Dollarization

Welcome to the latest edition of Essential Economics! We come to you from Dubai this week, where I am attending the World Economic Forum’s Chief Economist Community meetings in addition to sessions on the macro outlook, AI, the energy transition and the longevity economy. The team has been active in the media this past week: I appeared on 21St Century Business to discuss the Fed while Louis Kuijs and Elijah Oliveros-Rosen appeared on CNBC to discuss China and emerging markets, respectively.

A cross-divisional team led by Jose Perez-Gorozpe published a special “Look Forward Journal” on the decade ahead for emerging markets in advance of our panel in Washington, DC next week. In our latest emerging markets monthly, the team led the Luca Rossi and Valerijs Rezvijs note that an escalation in the Middle East conflict could drive oil prices higher, impacting EMs more than DMs. Sylvain Broyer blogs that Sweden might be a model for Europe to resolve its conflicting challenges of reducing public sector debt while boosting productivity and competitiveness. Harumi Hasegawa, our newest team member, writes that the Argentine plan to pursue dollarization could help curb inflation and stabilize the economy, but its long-term success would depend on the implementation of reforms. Finally, my senior team travels to DC next week the annual meetings of the International Monetary Fund, World Bank and International Institute of Finance next week to present, learn, and network.?

Economists In The News

It has been another busy week in the media for the Ratings economics team:

·??????? I appeared on Century 21 Business from the New York Stock Exchange to share our latest US macro view including the timing of upcoming Fed rate cuts.

·??????? During his trip to Singapore, Louis appeared on CNBC Squawk Box Asia to discuss the likely effectiveness of China’s latest round of stimulus measures.

·??????? Elijah appeared on CNBC Africa to discuss the findings of our latest emerging markets monthly report, including energy prices and the impact of Fed rate moves.

·??????? Vishrut also appeared on CNBC Squawk Box Asia in Singapore, discussed our latest GDP forecasts, narrative, and risks for Southeast Asia.

To watch my interview, click here.

To watch Louis’s interview, click here.

To watch Elijah’s interview, click here.

Look Forward: Emerging Markets – A Decisive Decade

Jose, Elijah and team take a long view and argue that emerging markets will play a crucial role in shaping the global economy, contributing about 65% of global economic growth by 2035. Nine key emerging markets rank among the 20 largest economies. However, per capita income in these EMs will remain well below that of advanced economies.?

Despite these opportunities, emerging markets will traverse an evolving geopolitical environment marked by unresolved conflicts and other persistent disruptions.

To read the full report, click here.

Emerging Markets Monthly: Navigating Risks Amid Fed Easing

Luca, Valerijs and team write that an escalation in the Middle East conflict could drive oil prices higher, impacting emerging markets (EMs) more severely than advanced economies. This is due to energy's larger share in their consumption basket. If oil prices take another leg higher, this could likely delay interest rate normalization in some EMs.

Uncertainty surrounding the upcoming U.S. elections heightens key risks for EMs.

To read the report, click here.

Swedish Blueprint for Europe

Sylvain blogs that several eurozone countries are facing what appears to be the conflicting challenges of reducing public sector debt to GDP while boosting productivity.?That's not an easy task, but Sweden's success in the late 1990s could provide a blueprint for a solution based on the application of new budgetary rules and the efficient allocation of private savings.

Sweden's economic reforms were born out of necessity following the bursting of a property bubble, that led to a state bailout of the banking system between 1990 and 1994.

To read the full report, click here.

Argentina and Dollarization in LATAM

Harumi writes that the Argentine government has indicated it may pursue dollarization to some degree. It could help curb inflation there and stabilize the economy, but its long-term success would depend on the implementation of economic and institutional reforms.

Past cases in Latin America suggest that dollarization can help stabilize countries experiencing economic stress by lowering and stabilizing inflation.

To read the full report, click here.

This Week: WEF in Dubai, Next Week: IMF/World Bank/IIF in DC

It has been a packed few days this week in Dubai at the World Economic Forum Annual Meeting of the Global Future Councils including a gathering of the Chief Economists Community. In addition to the economist sessions, I appeared in a Bloomberg-sponsored panel on reimaging growth and attended an excellent slate of though provoking seminars on AI, trade, finance, and longevity.

Next week the senior Ratings economics team heads to Washington DC for an annual trip to attend the meetings of the International Monetary Fund, World Bank, and Institute of International Finance.

As always, you can always find the latest research from the S&P Global Ratings Economics team here.