Author: Markus Jäger +1 212 250 6971
Risk varies across emerging economies
February 25, 2016
Emerging markets risk increased over the past 24 months. EM equity markets have fallen, in some cases very sharply. Economic growth has slowed almost everywhere. Brazil and Russia are mired in deep recessions.
EM sovereign risk has also increased, but in absolute terms it remains quite manageable, generally speaking. While EM risk used to be highly correlated, investors today differentiate much more than in the past.
Last but not least, it is worth highlighting that sovereign risk in Indonesia and Korea is at the same level it was 24 months ago, while in Brazil, Mexico and Russia, CDS spreads have doubled.