Europe， Middle East and Africa Emerging Markets Weekly

Investment Rating - The report indicates a potential for a larger than previously forecasted 25 basis point cut in September, with a likelihood of 40% to 50% [2]. Core Insights - The South African Reserve Bank (SARB) has been cautious in starting an easing cycle despite diminishing local political and fiscal risks. Inflation risks are skewed to the upside, particularly due to foreign exchange pressures and services inflation [2][3]. - The near-term outlook for non-core inflation, especially transport inflation, has improved, which may lead to a reduction in headline inflation by 0.5 percentage points below the target in the next quarter [2]. - The SARB is expected to update its inflation risk assessment to a more balanced view at the next Monetary Policy Committee (MPC) meeting, potentially revising down its inflation outlook by 0.2 percentage points in the near term [2][3]. Economic Data Summary - The report highlights various economic indicators, including: - July CPI for Romania at 5.0%, down from 5.2% in June [4]. - Current account data for Turkey showing a deficit of 0.3 billion USD in January, improving from a deficit of 1.2 billion USD [4]. - A strong rebound in GDP growth for Romania is expected, driven by retail sales data, with a forecast of 6.1% growth for Q2 [4]. - The report also provides forecasts for inflation and monetary policy changes across various countries, indicating a general trend towards easing in several emerging markets [6][10]. Foreign Exchange Outlook - The report presents forecasts for various currency pairs, including: - EUR/USD expected to be 1.09 in 2024, with a slight decrease to 1.05 in 2025 [8]. - USD/ZAR forecasted to decrease from 18.37 to 17.25 by 2025 [8]. - The report indicates a general trend of currency depreciation against the USD for several emerging market currencies [8].