Lebanon’s political, economic and financial situation is highly uncertain. Absent real reforms, Lebanon's economic trajectory seems headed toward that of a “failed state.” Carrying out reforms could lead to an agreement with the IMF and unlock financial support from the international community.
 

China's core CPI stayed at 0.5% in the past five consecutive months. This note investigates the drivers of China's inflation. We find that the output gap was the main culprit of disinflation in 1H due to the COVID-19 lockdown. Low oil prices and RMB appreciation further depressed domestic prices. 

Foreign investor interest in Sub-Saharan Africa has picked up in recent months. This is partially due to a marked shift to risk-on sentiment in financial markets. Countries from the region are now gradually returning to the Eurobond market. Still, the outlook for deficit financing and flows to local markets remains uncertain.

We expect Brent oil prices to average $47/b in 2021, but upside risks are significant. Low interest rates, a weaker US$, tighter supply, and strong demand from East Asia are boosting non-fuel commodity prices. 

The EM policy response to the COVID-19 shock represents a break from past crises. EM central banks eased monetary policy providing support to the domestic economy. Higher liquidity allowed governments to issue more debt in domestic bond markets. Still, fiscal support has been smaller than in DM, with most EMs tightening in 2021.

Activity has bounced back strongly following a sharp contraction in 2020Q2. The impact of political turmoil on the economy has been modest, and nonresident flows into government debt have remained stable. Uncertainty ahead of the April 2021 general election is the main risk to the growth outlook. 

Currently, the digital RMB (DCEP) is designed to be strictly cash-like with no interest payment and distributed by commercial banks to minimize the risk of disintermediation. Its impacts on banks, monetary policy, and RMB globalization depend on how the design will evolve. 
 

We have added new enhancements to our debt tracking framework for mature markets, improving the comparability of our debt estimates—especially during periods of large swings in GDP, as has been the case during the COVID-19 pandemic; Using this method, global debt is estimated to reach nearly $275 trillion in Q3 2020—some $2.5 trillion higher than our previous estimate