Emerging Markets Stare At Another Challenging Year: DB

Faced with stagnant export demand, a lackluster investment environment, and capital flows that are drying up, emerging markets are likely to witness another challenging year full of event risks, believe analysts at Deutsche Bank. Taimur Baig and Gautam Kalani explain in their Feb. 16 research report titled “EM Vulnerability Monitor” that all 26 countries in their sample ended up seeing their currencies weaken.

Elevated stress levels in many emerging markets

Deutsche Bank compiled its vulnerability monitor to assess the susceptibility of emerging market countries to economic crises or a period of painful adjustment, should external conditions worsen. The vulnerability score is computed by considering 10 indicators capturing vulnerabilities across four key dimensions: macroeconomic stability, private leverage, external imbalances and sovereign risk. The following sets forth...