Emerging economies: weak growth,

Emerging economies bank lending surveys continued to point to a slight tightening, in Asia in particular, (Chart 1) with slightly deteriorating bank funding conditions. World trade has decelerated and the expected pick up in emerging countries’ exports has so far not materialized while the boost stemming from the fall in oil price has not yet translated into increased business confidence: E.M. activity hardly picked up in the fourth quarter and beginning 2015, the PMIs are still just hovering around 50. Moreover, up to now, consensus growth expectations continue to decline for emerging economies (while they stabilized for developed ones).

Against such a disappointing backdrop, the fall in oil price helped push inflation downwards (Chart 2) and many emerging central banks are now able to ease monetary policy (Chart 3). In some cases, given the existing leeway, fiscal policy may also provide some support to activity: emerging economies growth could, finally, reaccelerate.