Multilingual AI-driven EM Outlook
The Czech Republic, Turkey, and India are enjoying some cheery sentiment on growth prospects. Czech growth is outpacing forecasts on a consumer boom while Turkey stunned investors with surging GDP before politics torpedoed financial markets. And Delhi is sprinting ahead of India’s broader economy. But the mood sours in Argentina, where unions and elections are rattling investors, and in Thailand, where political gridlock threatens to turn the “Land of Smiles” into a frowny faces as ASEAN’s slowest grower. EMAlpha’s Macro Monitor uses multilingual AI to track the current state of local sentiment in the newsflow across the EM universe.
Czech Republic/Economy: The recent newsflow indicates a very positive outlook for the Czech Republic’s economy as a new data released for Q2 shows the economy growing 2.6% year-on-year and 0.5% quarter-on-quarter, surpassing initial estimates. This growth is due mainly to increasing household consumption. US trade tariffs appear to actually be helping Czech trade as stockpiling in advance of the tariffs and increased demand from other countries is noted. Coupled with stable monetary policy, this economic growth should give investors an even stronger tailwind as the benchmark PX Index is up 28% YTD and 42% over the past year.
Turkey/GDP: Investor sentiment was brimming after Q2 GDP of 4.8% came in well above market expectations and accelerates the pace of growth despite earlier expectations of a slowdown. The big contributors to growth were construction, information and communication services. But sentiment on Sept 2 got jammed into reverse by political turmoil on a court-ordered removal of opposition leadership in the Republican People’s Party (CHP) in Istanbul. This has led to concerns about increased government pressure on opposition forces ahead of presidential and parliamentary elections. This triggered panic selling on the benchmark BIST 100 Index, which has dropped nearly 6% over the past two days.
Fig. 1: EMAlpha’s Multilingual AI inspected local Turkish media and used local language sentiment analysis to detect sentiment scores for various macro themes for the country. The scores are normalized such that +1.00 signifies extreme optimism and -1.00 signifies extreme pessimism.
India/Business: Sentiment for the business sector in India is getting a bump from Delhi’s manufacturing sector that registered growth of nearly 12% over the past year, which is three times the national average. Delhi’s overall industrial output growth in 2024-25 was 9.2%, more than double the national rate.
Most Negative EM Sentiment Signals
Argentina/Business: September 2 was Industry Day in Argentina, and the country’s labor unions didn’t waste the opportunity to bash the underbelly of economic liberalization reform efforts, such as the decline in industrial production, job losses (130,000 since November 2023), reduced wages and a greater reliance on imported goods. This united front of labor unions appears to have put a dent in local sentiment through a well-orchestrated series of news articles in the Argentine media rolled out on Industry Day.
Argentina/Stock Market: Investor sentiment is being roiled by politics in the run-up to national legislative mid-term elections in October that are a key test for President Javier Milei’s administration. Also, Buenos Aires is holding its provincial election on September 7. The government intervened in the foreign exchange market to support the peso and reduce volatility and restore market stability ahead of the elections (the peso operates within a managed currency band to the USD). Sovereign bonds sold off on fx market volatility to the extent that country risk for Argentina, tracked by a JP Morgan index, reached its highest level since currency controls were lifted in April. The benchmark Merval Index has dropped15% over the past month.
Fig. 2: EMAlpha’s Multilingual AI inspected local Polish media and used local language sentiment analysis to detect sentiment scores for various macro themes for the country. The scores are normalized such that +1.00 signifies extreme optimism and -1.00 signifies extreme pessimism.
Thailand/GDP: In local Thai language media, there is mounting concern that the Thai economy is in decline, due to political uncertainty, the potential dissolution of parliament and a new prime minister, and the disruption of disbursements from the government that keep the economy on track. The economy expanded by 2.8% in Q2, down from 3.2% in Q1 and may only eke out 1% growth in the second half of 2025, according to several sources. This would put Thailand as the slowest growing economy in ASEAN.
Global Developed Market Sentiment Highlights: The French bond market has been under stress due to its nearly 6% budget deficit and political instability ahead of a confidence vote that has been called by Prime Minister François Bayrou for September 8. But France/Bond sentiment spiked upwards in the last week on a spate of new corporate bond issuance as the bond market stabilized. Sentiment towards Canada/Commodities was also enthusiastic as gold prices have risen to new highs and gold producers are increasing production. Also receiving increased demand is Canada’s potash and timber markets.
For Media Inquiries, contact Brad Durham, [email protected]
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