After several months of market volatility, emerging markets were given a respite when the U.S. Federal Reserve decided to delay tapering its asset purchases, but some may be squandering the chance to address economic reform.
“An improvement in government finances would leave countries less vulnerable to future bouts of market turmoil. It would also give them more scope to counter future economic downturns,” said Krystal Tan and Daniel Martin, economists at Capital Economics, in a note.
“Some of the governments that most need to rein in their deficits to help their economies withstand future bouts of market volatility are showing the least willingness to do so,” they said, citing India and Thailand.
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