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Rising Risks in Emerging Asia
Given the Fed’s worries about emerging markets, ECRI has investigated how susceptible major export-dependent Asian economies are to exogenous shocks. Throughout the summer, the Fed had been signaling an imminent rate hike, but then kept the benchmark rate unchanged in September, voicing concerns about the “possible effects of slower economic growth in China and emerging markets.”
Our analysis is based on our country-specific leading exports indexes which capture export growth prospects for key countries in emerging Asia, including China, India, Korea and Taiwan. While export growth is currently near zero or negative across these economies, this analysis already provides insights as to the future direction of their exports, which will in turn weigh on Fed policy in the months ahead.