Wednesday, February 19, 2014

Dr Nouriel Roubini on the Fragile Five

Many emerging markets are in real trouble.

The list includes India, Indonesia, Brazil, Turkey, and South Africa—dubbed the Fragile Five because all have twin fiscal and current account deficits, falling growth rates, above-target inflation, and political uncertainty from upcoming legislative or presidential elections this year. But five other significant countries—Argentina, Venezuela, Ukraine, Hungary, and Thailand—are also vulnerable. Political and electoral risk can be found in all of them, loose fiscal policy in many of them, and rising external imbalances and sovereign risk in some of them.