Emerging Markets View: Emerging Markets Remain Poised for a Strong Rebound in the Second Half of the year, but risks are tilted to the downside

The global economy is on course to rebound from the pandemic-induced recession in 2021 led by an increasing number of large economies. The rotation from goods to services consumption is expected to produce above-trend growth in both this year and next. While the pace of vaccination has picked up in recent weeks in several emerging markets, including Latin America, low overall vaccination rates remain a risk to the short-term outlook. Renewed outbreaks of COVID-19, as seen in India in April and May acts as a break on confidence. Amid rising price pressures, several central banks including those in Russia and Brazil have started to tighten monetary policy recently, even though their economies are still rebounding from the pandemic-induced recession.