As the emerging market sell-off in 2018 or the 2013 taper tantrum tells us, capital flows to EMEs are vulnerable to advanced economy central bank policy movements, particularly by the US FED. Therefore, now is the time for EMEs to further strengthen their monetary policy frameworks – and build on their hard-won monetary policy independence.
Business fixed investment has picked up, although weakness has been seen in some industries. The employment and income situation has remained relatively weak on the whole, although improvement has been seen in some parts. Private consumption has started picking up again, with downward pressure stemming from COVID-19, particularly on services consumption, waning.