Itaú BBA - Amid the recovery, commodities sustain emerging market assets, but looming US inflation is a risk

Global Scenario Review

< Back

Amid the recovery, commodities sustain emerging market assets, but looming US inflation is a risk

June 11, 2021

Global recovery continues and sustains commodity prices and emerging market assets, but US inflation brings risks

For the version with all charts and tables, please open the attached pdf file

• 
With vaccination progressing, emerging markets will likely control the pandemic in the coming months.

• U.S.: inflation risk persists, but spikes are likely to be temporary; we see core PCE at 2.9% in 2021 and 2.3% in 2022 as the Fed gradually withdraws stimulus.

• China: stimulus withdrawal is proceeding smoothly, reducing the risk of an undershoot on activity. We have left our 2021 GDP forecast at 8.5% and increased our 2022 estimate to 5.8% from 5.0%.

• Euro Area: the recovery is likely to gain steam, bringing the region’s GDP all the way back to its pre-pandemic trend by year-end.

• Commodities: we see prices stabilizing at robust levels, reducing inflation pressure but remaining supportive of EM exports and currencies.

• LatAm: stronger growth and higher inflation are likely to lead to wider monetary policy tightening.

 

Global | Forecasts and Data


Compared scenario



For the version with all charts and tables, please open the attached pdf file



< Back