MUFG’s EM GDP Nowcast Model – July 2023
- Our EM nowcast modelling framework that we launched earlier this year (see here) continues to estimate EM real GDP growth (seasonally adjusted annual rate) in Q2 2023 at 4.3% as of June 2023 (consensus 5.6%).
- The regional breakdown of our estimates points to 6.0%, 1.8% and 3.2%, for EM Asia, EM EMEA, and LatAm, respectively.
- Sequential weakness in China is likely to weigh on the near-term trajectory but, with the drag from last year’s tightening in global financial conditions and higher commodity prices now behind us, we are relatively optimistic on the EM growth outlook.
- 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 monetary policy easing where external balances allow.
