Tentative signs of stabilisation
...
• In recent months there have been tentative signs that the contraction of manufacturing activity is abating, albeit from very low levels. At the moment it looks as if China and India might be the first major economies to recover from the global financial crisis.
• Despite some light emerging at the end of the tunnel, we remain cautious. The negative ramifications from the sharp contraction in activity will start to play out for emerging markets in the coming months.
...but very challenging year ahead
• Capital flows into emerging markets will come under further pressure from weaker FDIs and remittances from overseas workers. The balance of payments crisis will remain at the top of the agenda for many emerging markets - not least in EMEA.
• In addition, increasing unemployment risks challenging the political status quo and protectionism is starting to raise its ugly head.
