Easing global funding aids emerging markets recovery: Moody’s

Easing global funding aids emerging markets recovery: Moody’s

While global financing conditions have eased markedly in recent months, many emerging and frontier market economies will commence their recoveries with greater fiscal and external weaknesses, said Moody's Investors Service in a new report."Emerging and frontier market economies have experienced a substantial shock through multiple channels: a drop in export values on lower commodity prices; weaker tourism and lower global demand; and volatility in non-resident capital flows. We expect fiscal and external imbalances to widen and, in the most severe cases, liquidity pressures will rise toward serious stress or default," said Michael S. Higgins, a Moody's Analyst.Some of these sovereigns have struggled to find external sources of borrowing to fund fiscal and external gaps, and have tapped emergency financing from international financial institutions like the International Monetary Fund and other