Karan Mehrishi, Lead Economist, Acuité Ratings & Research, Opinion on dangers pertaining to the widening interest rate gap between Emerging and Developed Markets

25 Oct 2018

Forbes

While inflation in BRICS countries (proxy for emerging markets) is declining or stable - that of developed markets is inching up faster than expected. The evolving situation will disrupt the ongoing fiscal consolidations across the emerging market space and batter its asset classes if experts remain less vigilant. The countries, which were running high inflationary pressures in the recent past are experiencing a period of relative stability despite increasing crude prices. However, developed market interest rate normalization is occurring faster, given rising inflationary trends – creating volatility.