Emerging markets vulnerable to US slowdown: BIS

AFP, June, 2008

BASEL(AFP) — Emerging markets, which economists say are able to withstand the current financial crisis, could still be hurt by an economic slowdown in the United States, the world's top forum of central bankers warned Monday.

The Bank for International Settlements said in its annual report that the United States remained a key outlet for emerging market exporters. A severe US downturn could have more serious consequences for emerging market econonmies than expected.

Domestic demand could also be difficult to shore up in the face of inflation, which is currently sharply higher due to soaring energy and food commodity prices.

In addition, countries with high deficits and high short-term debt would find it harder to secure funding.

"Although growth...