Today News Journal
    What's Hot

    Reduce risk for dementia by improving diet and activity levels, studies say

    July 30, 2022

    What is monkeypox, and how can you stay safe while it spreads?

    July 30, 2022

    Chips Act Skips US Leaders for Asian Winners

    July 30, 2022
    Facebook Twitter Instagram
    Facebook Twitter Instagram
    Today News Journal
    Contact Us
    • Home
    • Trending
    • Business
    • Health
    • Technology
      • Automobile
      • Gadgets
      • Mobiles
      • Robotics
    • Lifestyle
      • Culture
    • Sports
    • Travel
    • Editorials
    • News
      • Politics
    Today News Journal
    Home » News » As Risks Rain Down on Emerging Markets, Unrest Rises
    News

    As Risks Rain Down on Emerging Markets, Unrest Rises

    James MartinBy James MartinMay 20, 2022No Comments4 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp VKontakte Email
    Share
    Facebook Twitter LinkedIn Pinterest Email



    Placeholder while article actions load

    When global economy-watchers talk about the outlook for so-called emerging markets these days, they’re kicking around some alarming terms: They see a toxic cocktail of risks, warn of a train wreck and are braced for a potential cascade of disasters. It’s the fallout from a mix of external shocks and mounting financial troubles washing over low- and middle-income countries, creating perhaps the biggest confluence of challenges since the 1990s, when a series of rolling crises sank economies and toppled governments. Turmoil fed by rising food and energy prices is already gripping places such as Sri Lanka, Egypt and Peru.

    1. What’s triggered the worry?

    A post-pandemic surge of inflation is a recipe for strain in countries that need US dollars for energy, medicine and food imports. Food costs account for about 40% of consumer spending in places like sub-Saharan Africa, more than double the share in advanced economies. To tame higher prices, the US Federal Reserve is embarking on its most aggressive series of interest-rate increases in two decades, which helps drive up the dollar and push down other currencies. So debt-servicing costs are jumping — just after developing nations borrowed billions in foreign currencies to fight Covid-19. 

    2. Did the pandemic cause this?

    The health crisis certainly created a backdrop of social tensions, which is one reason economists are starting to suspect a broader trend in the upheaval hitting some of the poorest corners of the globe. Peru, which had one of the world’s highest Covid death rates, was rocked by weeks of violence in March and April as farmers and truckers protested the rising cost of fuel and fertilizers.

    The current dynamic can trigger fits of panic among international investors and sudden flights of capital from the countries most exposed. That’s places like Egypt, the world’s largest wheat importer and one of the IMF’s biggest borrowers in recent years. After Russia’s invasion of Ukraine sent global commodity prices surging, the country’s central bank let the Egyptian pound weaken more than 15% in a matter of hours and hiked the benchmark interest rate for the first time in five years amid an outflow of hard currency. 

    4. Where else is trouble brewing?

    Sri Lanka is seen as a prime example of how shortages of food and fuel can spill over into violent street protests and destabilize an unpopular government. The South Asian nation defaulted on its foreign debt in May for the first time since achieving independence from Britain in 1948. A handful of other nations, including Pakistan, Tunisia, Ethiopia, Ghana and El Salvador were in danger of following suit, according to Bloomberg Economics. As of mid-May about a dozen emerging-market countries had government bonds trading with yields at least 10 percentage points more than US Treasuries, a benchmark of distress. That compared with six a year earlier. While the direct effect of a string of defaults on the global economy would be small, blowups in the developing world have a history of spreading well beyond their starting points. That’s what happened in 1997, when a currency devaluation in Thailand touched off a broader Asian crisis and ultimately led to Russia’s default on its local debt.  

    In some ways, the spike in global commodities prices has been a boon for resource-rich regions like Latin America. Exports of beef and copper rose quickly in places such as Brazil and Chile. But with much of the region’s fuel and fertilizers imported, the worry is that higher prices can still feed off of each other. In Brazil, where tensions are running high ahead of an election in October, President Jair Bolsonaro’s government used the commodities windfall to expand aid to the poor after a spike in gasoline prices helped push inflation past 12% in April. 

    6. What’s the response?

    The World Bank mobilized a $170 billion crisis-response package in April, more than the $157 billion spent for its initial Covid-19 response. More countries entered rescue talks with the IMF. And while many wealthy nations gave developing countries a pass on making debt repayments while they dealt with the virus, there has been slow progress on a plan to help debt-ridden nations restructure what they owe. A collective $35 billion bill is coming due this year. The clock is ticking: Oxfam International, a charity group, warned that the impact of Covid-19 and surging food prices are set to send more than a quarter of a million people into extreme poverty this year. 

    More stories like this are available on bloomberg.com



    Source link

    Related posts:

    1. UK petrol price jumps above £1.50 as oil costs rise
    2. Teenager rescued after falling eight metres down Brisbane stormwater drain | Queensland
    3. ‘Smartest one gets to the top’: Trump again praises Putin at Georgia rally | Donald Trump
    4. Russia-Ukraine war latest: war will become ‘endless bloodbath’ without more weapons, Zelenskiy says – live | World news
    Share. Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email
    Previous ArticleWhy Wiping Out Smallpox Has Stoked Risk of Monkeypox
    Next Article Why Sweden’s Stance on Kurds Riles Turkey’s Erdogan
    James Martin
    • Website

    Related Posts

    Chips Act Skips US Leaders for Asian Winners

    July 30, 2022

    Shapeshifting, robotic clothes could help people stand up

    July 29, 2022

    What’s Next for China Evergrande, Crushed by Debt?

    July 29, 2022

    Rail strike to cause severe disruption across Great Britain on Saturday | Rail strikes

    July 29, 2022

    Leave A Reply Cancel Reply

    Search
    Categories
    • Automobile
    • Business
    • Coronavirus
    • Culture
    • Editorials
    • Finance
    • Gadgets
    • Health
    • Lifestyle
    • Mobiles
    • Money
    • News
    • Politics
    • Sports
    • Technology
    • Travel
    • Trending
    • World
    Latest Posts

    Reduce risk for dementia by improving diet and activity levels, studies say

    July 30, 2022

    What is monkeypox, and how can you stay safe while it spreads?

    July 30, 2022

    Chips Act Skips US Leaders for Asian Winners

    July 30, 2022

    An additional 786,000 monkeypox vaccine doses will soon be available in the United States

    July 30, 2022
    • Facebook
    • Twitter
    Don't Miss
    Health

    Reduce risk for dementia by improving diet and activity levels, studies say

    By James MartinJuly 30, 20220

    One study investigated how physical and mental activities such as household chores, exercise, and visiting…

    What is monkeypox, and how can you stay safe while it spreads?

    July 30, 2022

    Chips Act Skips US Leaders for Asian Winners

    July 30, 2022

    An additional 786,000 monkeypox vaccine doses will soon be available in the United States

    July 30, 2022
    • Facebook
    • Twitter
    About Us

    Hello friends, I am James Martin. Welcome to my blog todaynewsjournal.com. We are a team of experienced journalists who are passionate about delivering the latest news and current events to our readers. Our editorial team is dedicated to providing the most accurate and up-to-date information possible. We aim to be your go-to source for news and current events. Here on this site, You will get up to date information regarding all important categories like business ideas, health tips,... (Read More)

    Latest News

    Reduce risk for dementia by improving diet and activity levels, studies say

    July 30, 2022

    What is monkeypox, and how can you stay safe while it spreads?

    July 30, 2022

    Chips Act Skips US Leaders for Asian Winners

    July 30, 2022
    SIGN UP NEWSLETTER

    Join The Conversation sign up to receive emails for The Daily special tips general info.

      Facebook Twitter Instagram Pinterest
      • Home
      • Editorials
      • Get In Touch

      Copyright © 2021-2022 · Today News Journal Privacy Policy

      Type above and press Enter to search. Press Esc to cancel.

      We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
      Cookie SettingsAccept All
      Manage consent

      Privacy Overview

      This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
      Necessary
      Always Enabled
      Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
      CookieDurationDescription
      cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
      cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
      cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
      cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
      cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
      viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
      Functional
      Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
      Performance
      Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
      Analytics
      Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
      Advertisement
      Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
      Others
      Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
      SAVE & ACCEPT

      Sign In or Register

      Welcome Back!

      Login to your account below.

      Lost password?