The international financial position of the BRIC countries (Brazil, Russia, India and China) has improved beyond recognition, reflected largely in their large official FX reserves. However, as of 2008, only China and Russia were creditors in terms of their net international investment position. China is already the world’s second largest net creditor, trailing only Japan. On current trends, China will not only replace the US as the world’s largest economy over the course of the next two decades, but it will also replace Japan as the world’s largest net international creditor... [more]

Despite the impact of the global crisis and periodic bouts of political turmoil, the theme of an African economic renaissance is not likely to vanish. Due to Sub-Saharan Africa's rich natural resource endowment, macro/structural improvements and increasing trade links with Asia we expect economic growth to rebound to the 5%-level over the next years. Thus, once the world economy recovers, interest in African frontier capital markets is set to rise again. While Nigeria, Ghana and Kenya are the most prominent countries in terms of size and capital-market development, Tanzania, Uganda and Zambia have strong potential as well... [more]

Empirical evidence suggests that savings rise after economic growth takes off. Economic reform and stabilization in Brazil seem to have triggered just such a growth take-off. However, in order for the virtuous cycle to be sustained at an ever higher level of 5% (or more), the government would need to allow domestic savings to rise. Officials frequently point to the significant levels of inequality and poverty and Brazil’s democratic political system in an attempt to rationalize why a reduction in government expenditure is neither desirable nor feasible. A look at India’s experience in the 2000s suggests that this view is overly pessimistic... [more]

In the past several years, Indian corporations have utilised a variety of sources such as equity markets, foreign direct investment, and private equity to raise capital. Capital availability through these sources was significantly affected by the crisis as both domestic and foreign investors turned risk averse. Small and medium enterprises are being particularly hard-hit. Although markets are rebounding and investments are rising once again, it may take until 2010 for capital flows to fully recover. This paper provides an overview of the various sources of corporate financing, the impact of the crisis, and the outlook over the next year. [more]

Unlike other Central and Eastern European (CEE) countries and the majority of the EU-15, Poland's economy is remarkably robust, exerting a stabilising effect on the entire region and many The gradual withdrawal of monetary stimulus in Western Europe will have significant repercussions on the funding structure of Eastern European banks. As long-term external wholesale or intragroup funding will become more costly banks have to reduce their dependence on external funding. Over the course of 2010 we expect banks to bring down their loan-to-deposit ratios via sluggish loan growth, some selling or restructuring of distressed assets and strong competition for (retail) deposits. [more]

Russia's boom in 2003-2007 was driven by rising oil prices and capital inflows. In mid-2008, Russia was hit by a commodity price shock and a reversal of capital flows. A deep recession followed. However, the situation has started to stabilise as of mid-2009. Massive monetary and, with a delay, fiscal stabilisation efforts have provided support, as have higher oil prices. It is still open whether Russia will be able to reduce its vulnerability to oil price fluctuations by generating non-oil growth. An improvement in Russia's conditions for doing business would be necessary to improve the country's growth potential. Nevertheless, economic growth at reasonable rates is feasible. Average GDP growth of 4% p.a. over the next few years is a plausible baseline, with risks on the upside. [more]