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| Can new Argentine President Mauricio Macri turn things around? His is not the only financially troubled G20 country. |
Four days in, I am not seeing major improvements in 2016 for commodity exporters, although I could (and hope to) be wrong for the rest of the year. Whatever the rest of us think hasn't stopped longtime FT commentator Martin Wolf from placing odds on those three countries as potential borrowers from the world's lender of last resort, the IMF, this year. The prospect is certainly not one any of these countries looks forward to, but don't be surprised if one does go the
poorhouse in 2016:
The G20 also contains 10 emerging economies. Some are being buffeted by sharp falls in commodity prices (Argentina, Russia and Saudi Arabia are prime examples). Some run significant current account deficits (Saudi Arabia again springs to mind, along with Brazil and South Africa). Both India and South Africa have fairly large fiscal deficits. Others, such as Brazil, have a smaller deficit but a sizeable burden of public debt. The countries that tick all the boxes for instability are Argentina, South Africa and Brazil. Under stress, those countries have recently changed finance ministers. Argentina has a new government that promises a new approach. The IMF stands ready. Will at least one of these countries call upon it? It seems likely.
It's odd that Martin Wolf doesn't mention how much foreign exchange reserves each of these countries holds. But, by that
measure, the skimpiest belong to Argentina (surprise!) and South Africa. By this measure, Argentina is most at risk, followed by South Africa.
