Report
Why emerging countries are less resilient to crises than OECD countries
The COVID crisis has illustrated once again that emerging countries are less resilient to crises than OECD countries for several reasons, beyond the obvious ones (health crisis, fall in global trade): Crises lead to a fall in commodity prices, and most emerging countries are commodity producers; Crises lead to capital outflows from emerging countries, which exacerbate the crisis by giving rise to a liquidity crisis and worsening the terms of trade due to exchange rate depreciat ion ; Emerging countries cannot use quantitative easing, because it immediately leads to the conversion of the money created into foreign currencies and to capital outflows; The automatic stabilisers provided by social safety nets are weak in emerging countries.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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