The COVID crisis has considerably worsened emerging countries’ terms of trade, making them highly fragile

The COVID crisis has considerably worsened the terms of trade for emerging countries (excluding China) under the effect of: The depreciation of their exchange rates, due to the rise in risk aversion and capital outflows; The fall in commodity prices. Emerging countries are poorer when their terms of trade deteriorate, given: The lower value of their exports relative to their imports; The increase in the national currency value of their debt denominated in foreign currencies. Emerging countries will therefore emerge severely weakened from the COVID crisis.