JP Morgan said economic growth in emerging markets will slow sharply this quarter, especially as the war in Russia continues and China suffers a new wave of corona infections,
The bank added that emerging market currencies are likely to underperform with the continued strength of the US dollar in addition to the risks related to the growth of the economies of countries in emerging markets, where the dollar recorded Its highest level in 20 years against a basket of developed market currencies, while the emerging market currencies index touched its lowest level since November 2020, according to CNBC Arabia.
The Bank's expectations come as Russia suffers from unprecedented sanctions from Western countries after Putin launched a military operation on Ukraine, as European Union governments approach From reaching an agreement on a sixth package of sanctions against Russia, which includes a ban on the purchase of Russian oil. In addition, the G7 leaders announced the strengthening of Russia's economic isolation and committed to ban or phase out Russian oil imports.
As for China, the closures in the country, in turn, led to the yuan reaching its lowest level since October 2020 against the dollar. Chinese export growth slowed to 3.9% in April compared to the previous year, down sharply from 14.7% recorded in March, although the reading came in slightly better than analysts' expectations of 3.2%.
However, it is the slowest pace since June 2020, as the closures in Shanghai specifically put pressure on the Chinese trade sector, which represents about a third of GDP
