The International Monetary Fund (IMF) on Wednesday revealed that the emerging market economies bore the brunt of the strongest U.S. dollar in two decades in 2022, a rise that battered them with capital outflows, higher import prices and tighter financial conditions.

The IMF said new research in its annual External Sector Report shows that the dollar's surge last year had a bigger impact on emerging markets than on smaller advanced economies, partly due to the latter group's more flexible exchange rates.

For every 10 percent of U.S. dollar appreciation linked to global financial market forces, emerging market economies faced a gross domestic product (GDP) output decline of 1.9 percent after one year, a drag that is expected to linger for 2.5 years, the IMF reported, outlining that the emerging market and developing economies with pre-existing vulnerabilities such as high inflation and misaligned external positions experienced greater depreciation pressures, while commodity-exporting economies benefited from the increase in commodity prices.

Source: Qatar News Agency