Which Emerging Markets Are Most Vulnerable To “External Shock”

Which Emerging Markets Are Most Vulnerable To “External Shock”

A new paper from the Center for Global Development attempts to discern which EMs are most vulnerable to an “external shock” (be it geopolitical or financial) and also seeks to determine which countries are more prepared to weather a storm now than they were pre-crisis. According to the study, the relevant factors are

1) current account balance,

2) ratio of external debt to GDP,

3) ratio of short-term external debt to reserves,

4) fiscal balance to GDP,

5) government debt to GDP,

6) inflation versus targeted inflation, and

7) financial “fragility”.
The values of the indicator for 2007 and 2014 are presented as well as the country rankings in both years. According to this methodology, the greater the value of the indicator the more resilient a country’s macroeconomic performance to external shocks is assessed to be



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