A view of an advertising billboard for the upcoming annual meetings of the IMF and the World Bank, in MarrakechLONDON - Emerging economies are facing headwinds from all sides, with a recent selloff in U.S. Treasuries and China's slowing economy adding layers of uncertainty while the Federal Reserve might not have reached the end of its rate hike cycle.
"Lower for longer Chinese growth is shaping a new regime of investments," Amundi's head of emerging markets Yerlan Syzdykov told Reuters. "It's necessary to establish time parameters and anchor expectations," Georgetown law professor Anna Gelpern said, referring to the Group of 20 leading economies' debt rework process known as the Common Framework, which has been criticised for lengthy delays.Argentina, Pakistan and Kenya top the list of nations that might face a sovereign debt default, according to JPMorgan's September investor survey.
At the same time, higher interest rates mean it has been "prohibitively expensive" for single-B sovereigns to tap international bond markets since early 2022, said Gregory Smith, fund manager at London-based M&G Investments."Can the Egypt IMF programme get larger financially is the big question for the meetings," Smith said referring to Cairo's $3 billion loan.
China and other large emerging economies have long demanded a greater say in the global financial architecture, which is still dominated by parameters set out by the 1944 Bretton Woods meeting, where the IMF and World Bank were established. A Kremlin propagandist faced backlash from Siberian officials after saying Russia should detonate a nuke in its own territory
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