MUFG’s EM GDP Nowcast Model – November 2023
- Our EM nowcast modelling framework that we launched earlier this year (see here) now estimates EM real GDP growth (seasonally adjusted annual rate) in Q3 2023 at 4.6% (4.9% previously) as of October 2023 (consensus 4.3%).
- The regional breakdown of our estimates points to 5.7%, 2.2% and 1.6%, for EM Asia, EM EMEA, and LatAm, respectively.
- Higher for longer DM interest rates and slower Chinese growth are driving investor sentiment. Yet, relatively resilient EM PMI data, recovering trade conditions indicate green shoots for certain EM economies, allowing us to remain relatively upbeat on EM growth going forward.
- We expect EM growth to trough this year but remain below potential in the 2024 recovery. The silver lining is that subdued growth should cap inflation, facilitating EM monetary policy easing ahead of the DM (where external balances allow).
