Erik Lueth

Global Emerging Market Economist

Erik is your typical EM aficionado. He has worked for the IMF, lived several years in Hong Kong and has an Indian wife. His motto: Get the bigger picture.

Posts by Erik Lueth

Economics

Rehab – China is tackling its debt binge

Something remarkable has happened over the past two years: China has started to tackle its addiction to debt. With the authorities finally addressing China’s biggest economic weakness, the medium-term risk to the Chinese (and global) economy should be on the decline.

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Economics

US-Sino relations - shifting grounds

How does the potential trade war look from China’s angle? Although a full-blown trade war between the US and China is not our base case, there is still a lot to consider. The macro impact currently appears to be very manageable, although even if it all blows over, we observe a tectonic shift in the US-Sino relationship.

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Economics

Tequila sunrise

On the face of it, things don’t look good for Mexico; and that’s reflected in asset prices. Its largest trading partner has threatened to scrap a free trade agreement that's been in place for almost a quarter century. In addition, a populist is leading in the polls to replace President Peña in the July elections. But look again and you might see a country potentially on the cusp of a spectacular comeback.

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Economics

Chinese inflation: Going hog-wild?

On Friday, we are likely to receive confirmation that Chinese inflation jumped to almost 3% in February, up from 1.5% previously. Higher Chinese inflation conjures up scary scenarios. It could force the People's Bank of China into hiking interest rates when the economy is slowing and saddled with massive debt. It could also add to building inflationary pressures in the US and UK, hastening interest hikes and weighing on equity and bond prices. But relax! The jump in Chinese inflation shouldn’t trigger any of this.

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Economics

Overrated? Why ratings agencies could be a contrarian indicator

How does emerging market debt typically perform after being downgraded from investment grade? Does forced selling lead to underperformance or is it all in the price by then?

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Economics

Good news for EM? Globalisation is alive and kicking

In the decades leading up to the global financial crisis (GFC), global trade grew roughly twice as fast as global output. But in the five years before 2016, trade mostly underperformed activity, prompting many to call the end of globalisation. We indulged in those discussions ourselves eighteen months ago. These calls, it seems, were premature.

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Economics

A new dawn? - Emerging market growth outlook

2017 looks set to mark the first year of an emerging market (EM) growth pick-up after six years of successive slowdowns. The growth acceleration is not only driven by the high-profile recoveries of Russia and Brazil, but comprises about 70% of the EM universe. So what could lie in store for EM in both the short and medium term?

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