Gauging EM/China Credit Impulses

In China and the majority EMs, credit impulses will be negative over the next 12 months as and if their credit growth converges towards their current nominal GDP growth. These negative credit impulses will dampen EM/China growth and their corporate profits. In the next 12 months, the credit cycle is most vulnerable in China, Brazil, Turkey, and Malaysia and least vulnerable in central Europe, the Philippines, and Mexico.