The turning tide - life after QE

Emerging economies are much better positioned than in the past to withstand policy tightening by the Fed and few are at risk of an immediate crisis. Nonetheless, we are entering a new era for emerging markets (EMs) which will see old stars fade and new stars start to shine. We expect EM GDP growth to stage a gradual recovery over 2014-15, but this will be led by smaller economies such as Indonesia, Mexico and the Philippines. By contrast, growth in the BRIC economies will remain extremely lacklustre.