Waves of overinvestment in real estate and infrastructure as a growth lever are exhausted

There are reasons to consider a recession call as currently premature, even recognizing clear and undeniable signs of an economic growth slowdown at the margin

What seems more likely is the combination of a global economic slowdown and continued tightening of global financial conditions. Equity markets in advanced economies will continue to exhibit downward slides until the monetary-financial grip eases.

How complementary - or substitute - will be movements in interest rates and central bank balance sheet downsizing? What are their likely consequences on capital flows to emerging markets?

“the death of globalization was an exaggerated announcement”

Pandemic, war and death in Ukraine, and droughts in the last 2 years… Such a combination looks apocalyptical. Now it is adding global hunger risks, because of the food price crisis.

New recent jumps made the increase in energy prices in the last two years the biggest in the last fifty years.

Last March, a proposal of dollarizing Argentina’s economy arrived at its Congress.

Emerging market and developing economies face a common set of external shocks but the impacts have been heterogeneous

The relative dominance of the dollar appears to be declining but at a very gradual pace.

The war in Ukraine is bringing substantial financial, commodity price, and supply chain shocks to the global economy

As in a boxing match, the expectation is that sanction blows to the opponent can knock them out, despite the exposure on the punching side.

Last Friday, announcements of understanding between Argentine government authorities and the IMF staff about a new support program were made from both sides. Meanwhile, in addition to the payment of an amortization due on Friday, another payment is also expected this week, both referring to the previous package, approved in 2018 and substantially disbursed afterward. Non-payment could sour relations at a critical moment for a new program to be approved by the IMF's board of executive directors in time for disbursements to cover larger obligations due in March.

Is the growth slowdown with tightening financial conditions in advanced economies likely to be disastrous for emerging markets, with landing becoming a hard one in their case?

The pandemic has accelerated history by reinforcing some previous trends, leading the world to a “great reset”. Among the enduring consequences of the pandemic, four of them are here highlighted: digital transformation has been speeded up; globalization will be reshaped; higher public debt will be a legacy from the crisis; and some economic scarring from the pandemic in labor markets may be expected.