Moody's: Emerging market 2020 outlook turns negative amid rising trade/ political risks

In its latest report published on Thursday, the global rating agency, Moody’s Investors Service, revised down its 2022 outlook on the Emerging Markets (EM) amid rising trade, policy and political risks.

Key Points:

“Emerging market growth slowed significantly in 2019 and the outlook for emerging markets in 2020 has tipped over to negative due to uncertainties around trade, politics and policy.”

Moody's Senior Vice President Gersan Zurita noted: Although recession risk is in focus globally, we do not expect a recession to materialize in any of the larger emerging market economies except in Argentina. Emerging markets will continue to have higher growth than developed markets with an expected average economic growth above 4.5% in 2020, compared with just under 1.5% across the largest advanced economies in 2020. However, growth rates are well below their historical averages, particularly in larger economics like Mexico, Russia, India and China.

“There is also a difference across various sectors in emerging markets. For instance, the slowdown in global trade in 2019 has dented emerging market manufacturing and export sectors. Meanwhile, Moody's expects stable conditions for infrastructure sectors in emerging markets.”