Escalation in the Middle East conflict could drive oil prices higher, impacting EMs more severely than advanced economies due to energy's larger share in their consumption basket. If oil prices take another leg higher, this could likely delay interest rate normalization in some EMs. China’s stimulus measures, including monetary easing and property market support, aim to boost sentiment and growth. However, weak credit demand limits their impact, with growth prospects hinging on the extent of additional fiscal stimulus.
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