First edition of the Digital Finance Update.

The June 2022 edition of the Insurance Update provides targeted updates on IIF insurance activities and events.

We revisit carbon intensity metrics for EM economies, such as CO2/GDP (with factors CO2/Energy and Energy/GDP).

The June 2022 edition of the Global Regulatory Update provides targeted updates on current workstreams and events.

The impact of U.S. interest rate increases on the GCC will be limited in an environment of high oil prices.

Global liquidity conditions look set to tighten further, which will force CEEMEA central banks to continue to hike interest rates. Wider macro imbalances also call for tighter policies in some cases. Energy shortfalls could lead to falling output and employment, which would ease demand pressures.

Growth is stalling as policy stimulus is reversed and global headwinds mount. Despite high copper prices, the current account deficit remains wide. Business and popular sentiment has sagged, and the administration faces steep challenges amid legislative deadlock and a politically tough tax reform.

China’s exports to Russia fell in March-May, as sanctions limited Russia’s ability to pay. China’s imports from Russia hit a record high in May, lifted by both growing volume and rising prices. We estimate that China has been paying spot price for Russian oil, but a discounted price recently.

Total global car sales are on track to hit their lowest level since 2010 as global recession fears loom.

Emerging markets have seen a "great moderation" of inflation in recent years. We see substantial risks of a synchronized reversal as DM inflation spills over. Central banks in EM started hiking rates earlier than those in DM in this cycle. However, with inflation expectations still less anchored in emerging markets, and the share of commodities in EM consumer price baskets much higher, they will have to continue hiking proportionally more than DM going forward.

Spiking commodity prices will dampen momentum in Frontier LatAm. We have lowered our 2022 growth projection amid the war in Ukraine. Recovery in tourism and still-high remittances would partly mitigate the drag. Higher oil prices and slowing external demand could worsen fiscal and external pressure.