The G20/IMF meeting last week raise concern that the balance of risks to global growth has improved, but that some hurdles along the way remain. These include the potential risk for reversal in capital flows from emerging markets to advanced economies as risk averse investors seek relatively more attractive advanced economies’ assets. 15.
And there is a risk of renewed bouts of market volatility with the expected normalization to a more neutral monetary policy stance in the United States. In either case, the result could likely lead to financial turmoil and difficult adjustments in some emerging markets, with a risk of contagion. 16.