“For instance, Türkiye exhibits all the characteristics of an economy that is highly sensitive to energy price shocks. Its central bank estimates that a sustained increase in oil prices of 10% would result in an additional 1 percentage point (pp) of inflation within a year. Estimates by local economists range from 4 to 6 pp, based on assumptions that the price of Brent crude will stabilise at USD 85 or USD 100 for at least a year, even taking into account the mechanism designed to cushion price rises, which is very generous to consumers (up to 75%). With the exception of Asian countries that are benefiting from the AI boom, such as Taiwan. As in 2022, the energy shock will affect emerging and developing economies. Today, as in the past, this shock is a negative-sum game between importing and exporting countries. Furthermore, although this is basically a supply shock, central banks in emerging economies may tighten their policies if they need to counter downward pressure on exchange rates, in order to prevent inflation from rising too sharply. However, compared to 2022, there are mitigating factors: 1/ the absence of a shock to agricultural commodity prices so far; 2/ AI, which is an external growth driver for Asian countries in particular; and 3/ the Fed is expected to adopt a more accommodative stance than in 2022 in response to the anticipated rise in inflation. In terms of the solvency and liquidity of public finances and external accounts, emerging economies are no more vulnerable than in 2022.” Læs hele analysen her.
Morten W. Langer
