Between June 2014  10  BIS central bankers’ speeches  and July 2015, capital outflows from emerging markets reached $ billion (see NN Investment partners, FT 19 August), in contrast with $ trillion inflows to these markets between 2008 and June 2014. Such outflows would impact on EMEs’ growth rates, thus lowering global demand.
If the Chinese economy deteriorates further, lower demand will drive down oil prices which are also being translated into lower inflation rates for non-energy components and feed into inflation expectations, leading to a worsening inflation outlook and making the ECB’s inflation target more difficult to reach.